It should be evident that a stock exchange does a lot more than merely providing a platform to accumulate and redirect surplus money towards profitable investments. It verifies the identity of buyers and sellers to make the exchange a safe and default-free zone.
After matching buyers with sellers, the Stock Exchange also ensures actual transfer of ownership happens easily. This function upholds liquidity in the market and supports the process of price discovery based on demand and supply.
To protect different stakeholders like companies, investors, and brokers, the Exchange regulates their behaviour. Finally, it also imparts essential information to help investors make educated investments.
Now, let’s learn more about stakeholders!