What Is a Stock Exchange?

Stock exchange

Stock exchange is for

Shanghai Stock Exchange

The establishment and dissolution of a stock exchange shall be determined by the State Council.

Applications for the establishment of a stock exchange are first reviewed by the China Securities Regulatory Commission and then submitted to the State Council for approval.

The establishment of a stock exchange must have a charter. The formulation and amendment of the articles of association of a stock exchange must be approved by the securities regulatory authority of the State Council.

Stock exchanges must indicate the words stock exchanges in their names. No other unit or individual may use a stock exchange or an approximate name. ^[5]

(1) The stock exchange shall provide protection for the organization of a fair and centralized transaction, announce the real-time quotes of securities transactions, and make a securities market quote table according to the trading day and publish it. Without the permission of the stock exchange, no unit or individual may publish real-time quotes on securities transactions.

(2) The ownership of securities transactions shall be subject to the suspension, resumption or termination of listing of stocks and corporate bonds in accordance with laws, administrative regulations and the regulations of the securities regulatory authority under the State Council.

(3) The stock exchange may adopt technical suspension measures when the normal conduct of securities trading is affected by unexpected events; due to force majeure events or to maintain the normal order of securities transactions, the stock exchange may decide to temporarily suspend city. When a stock exchange adopts a technical suspension of trading or decides to temporarily suspend trading, it must promptly report to the securities regulatory authority of the State Council.

(4) The stock exchange implements real-time monitoring of securities transactions and reports on abnormal transactions in accordance with the requirements of the securities regulatory authority of the State Council. Stock exchanges shall supervise the disclosure of information by listed companies and relevant information disclosure obligors, and urge them to disclose information in a timely and accurate manner in accordance with the law. The stock exchange may, as required, restrict trading on securities accounts that have significant abnormal trading conditions, and report to the securities regulatory authority of the State Council for the record.

(5) The stock exchange shall draw a certain percentage of the transaction fees, membership fees, and seat fees it collects to establish a risk fund. The risk fund is managed by the board of directors of the stock exchange. The stock exchange shall deposit the collected risk funds into a special account of the bank where the account is opened, and shall not use it without authorization.

(6) The stock exchange shall formulate listing rules, trading rules, membership management rules and other relevant rules in accordance with securities laws and administrative regulations, and report to the securities regulatory authority of the State Council for approval.

Establishment and dissolution of stock exchanges

The establishment of a stock exchange shall be reviewed by the Securities Management Committee of the State Council and submitted to the State Council for approval. In practice, when applying for the establishment of a stock exchange, the following documents should be submitted to the Securities Management Committee of the State Council: an application; draft articles of association and main business rules; a list of committees to be added to the committee; a list of candidates for the board of directors and resumes; explanations of venues, equipment and funds; Information note on proposed managers; etc. Among them, the main issues of the articles of association of the stock exchange are: the purpose of establishment; the name; the main office and trading venues and facilities; the scope of functions; membership and the procedures for joining and withdrawing; the rights and obligations of members; the disciplinary action against members; the organization And its functions and powers; the creation, appointment and removal of senior management and their duties; capital and financial matters; conditions and procedures for dissolution; and so on.

If the dissolution of the stock exchange as stipulated in the articles of association occurs, and the dissolution is decided by the member, it shall be reported to the State Council for dissolution after examination and approval by the State Council Management Committee. If there are any serious illegal acts in securities transactions, the dissolution decision shall be made by the State Council Management Committee and reported to the State Council for approval of dissolution.

Stock exchange business rules

The business rules of the stock exchange include listing rules, trading rules, and other rules related to stock trading activities. Specifically, the following matters should be included: the conditions for listing of shares, the application procedures, and the content and format of the listing agreement; the content and format of the listing announcement; the type and duration of the stocks to be traded; the trading methods and operating procedures of the stocks; Settlement; deposit of trading margin; suspension, resumption and cancellation of trading of listed stocks; suspension and closing of stock exchanges; collection of listing fees and transaction fees; provision and management of stock market information of the stock exchange; Dealing with exchange business rules.

Stock Exchange Organization Form

The stock exchange has a committee meeting, a council, and special committees.

The general meeting is the highest authority of the stock exchange and is held at least once a year. The functions and powers of the General Assembly are: to formulate the articles of association of the stock exchange; to elect and remove directors; to review and approve the work reports of the council and general manager; to consider and approve the financial budget and final accounts of the stock exchange; to decide other major matters of the stock exchange .

The council is responsible to the general assembly and is the decision-making body of the stock exchange. Each term of office is 3 years. The responsibilities of the board of directors mainly include: implementing the resolutions of the general meeting; drafting and revising the business rules of the stock exchange; hiring the general manager and appointing the deputy general manager based on the nomination of the general manager; reviewing the work plan, financial budget and final accounts proposed by the general manager ; Review the acceptance and punishment of members; determine the establishment of special committees as needed; etc. The stock exchange has one general manager and one to three deputy general managers. The term of office of the general manager and deputy general managers is three years. The general manager is responsible for the daily management of the stock exchange under the leadership of the council, and is the legal representative of the stock exchange. If the general manager is unable to perform his duties for any reason, the deputy general manager shall perform the duties on his behalf.

The special committees mainly include the listing committee and the supervision committee. The listing committee is composed of 13 members (two lawyers, one certified public accountant, two members of the stock exchange and foreign members; one member from the China Securities Regulatory Commission and an institution authorized by the people's government where the stock exchange is located; one member of the stock exchange Chief and General Manager; 1 other director of the stock exchange, whose duties are mainly to approve the listing of stocks, formulate listing requirements, and propose amendments to the listing rules. The supervisory committee is composed of 9 members (2 members of the locality of the stock exchange, foreign 4 members, 1 lawyer and certified public accountant; 1 director), each term of 3 years, its main duties are: to supervise the implementation of the general meeting, the board of directors and other senior management personnel; to supervise the director, general manager Managers' and other staff's compliance with laws, regulations and the regulations and business rules of the stock exchange; monitoring the financial situation of the stock exchange; etc.

Stock exchange supervision

The stock exchange's supervision of stock trading activities mainly includes the following:

(1) The stock exchange shall immediately publish the market quotation, and prepare a stock market statement on a daily basis to record and announce the following in an appropriate manner: the name of the listed stock; the opening, maximum, minimum, and closing price; and the closing price on the previous trading day Changes in market prices after comparison; volume and value of points and totals; stock indexes and their changes; etc.

(2) The stock exchange shall prepare daily statements, weekly statements, monthly statements and annual statements on the transactions in the market, and make them publicly available in a timely manner.

(3) Stock exchanges shall supervise the disclosure of information by listed companies in accordance with regulations.

(4) The stock exchange shall enter into a listing agreement with a listed company to determine the relationship of rights and obligations between them.

(5) Stock exchanges should establish a system of recommenders for listing to ensure that listed companies meet listing requirements.

(6) The stock exchange shall make a decision to suspend, resume or cancel the trading of listed stocks in accordance with the stock regulations, the listing rules of the stock exchange, the listing agreement, or the requirements of the China Securities Regulatory Commission.

(7) The stock exchange shall set up archives of listed companies, make statistics on the holdings of listed stocks by directors, supervisors and senior management of listed companies, and monitor their changes.

(8) Members of the stock exchange shall abide by the articles of association and business rules of the stock exchange, pay seat fees, handling fees and other fees to the stock exchange and deposit transaction deposits in accordance with the relevant provisions of the articles of association and business rules.

(9) Members of the stock exchange shall provide quarterly, interim and annual reports to the stock exchange and the China Securities Regulatory Commission, and actively report relevant situations; ownership of securities trading requires members to provide relevant statements, books, transaction records and other documents .

Stock Exchange Management and Supervision

(1) The stock exchange shall not in any way transfer the establishment and business licenses it has obtained in accordance with the stock exchange regulations.

(2) Non-member directors and other staff members of the stock exchange shall not take part-time positions in member companies of the stock exchange in any form.

(3) The directors, general managers, deputy general managers and other staff members of the stock exchange shall not disclose or use inside information in any way, and shall not obtain benefits from members of the stock exchange or listed companies in any way.

(4) In performing their duties, senior management personnel and other staff members of the stock exchange should evade when they have relatives or other interests.

(5) The stock exchange shall establish a system that complies with the requirements for stock supervision and administration, and shall provide stock market information to the stock exchange in accordance with the requirements of the people's government where the stock exchange is located and the China Securities Regulatory Commission.

(6) The authority authorized by the people's government where the stock exchange is located and the China Securities Regulatory Commission have the right to require the stock exchange to provide relevant materials for members and listed companies.

(7) The stock exchange shall, within three months after the end of each financial year, prepare a financial report audited by an accounting firm with independent accounting qualifications for the stock industry and report it to the authorized institution of the people's government where the stock exchange is located and the China Securities Regulatory Commission. For the record, the management committee shall also report to the Securities Management Committee of the State Council.

(8) Unexpected incidents of the stock exchange leading to the suspension of the market, or technical suspension measures to maintain the normal order of the stock exchange must immediately report to the people's government where the stock exchange is located and the China Securities Regulatory Commission, and copy the securities of the State Council Management Committee.

(9) The authority authorized by the people's government where the stock exchange is located and the China Securities Regulatory Commission have the right to require the stock exchange to provide reports and materials related to business and finance, and have the right to send personnel to inspect the business, financial status of the stock exchange, and Accounting books and other relevant information.

(10) The stock exchange shall deposit the transaction security deposits paid by its members into a special bank account in accordance with the relevant state regulations, and shall not try it without authorization.

(11) When a stock exchange or a member of a stock exchange is involved in a lawsuit, and senior management personnel of these units are involved in a lawsuit due to the performance of their duties or should be dismissed in accordance with stock regulations, the stock exchange shall promptly report to the people's government where the stock exchange is located Reports from authorized institutions and China Securities Regulatory Commission.

Negative effects of stock exchanges

It can be seen from the practice of stock trading that the stock exchange helps to ensure the continuity of the operation of the stock market, realize the effective allocation of funds, form a reasonable price, reduce the risk of securities investment, and link the long-term and short-term interest rates of the market. However, stock exchanges can also have the following negative effects:

1. Disrupt financial prices. Since a large part of the transactions on the stock exchange are only resale and buyback, the stock exchange has a large turnover in securities trading, but the actual delivery is not large. Moreover, since such transactions do not actually represent the purchase and sale of real financial assets, their supply and demand forms largely do not reflect the actual situation and may disrupt financial prices to a certain extent.

2. Susceptible to false news. Stock exchanges are particularly sensitive to all kinds of news. Therefore, as long as someone deliberately spreads false information, or misrepresents the financial status of an enterprise, or spreads false political trends, and so on. Both may cause the exchange price to change drastically, and some speculators will suffer significant losses, while others may greatly benefit.

3. Engage in improper transactions. Engaging in improper transactions mainly includes matching transactions, false selling transactions and partner transactions. Matching transactions refer to the fact that a trader entrusts two brokers through multiple channels to buy one side and sell the same amount of securities at one price to limit the normal price of the securities. False selling refers to the fact that a trader deliberately throws out securities at a high price, and at the same time orders another broker to make an acquisition, and agrees that all losses remain the responsibility of the seller, with the result that it may cause false prosperity of the securities. Partner trading refers to a group of two or more people to manipulate prices. Once the purpose is achieved, the partners will be dissolved, including trading partners (partners or secretly buying securities of interest in the open market to prevent the prices of these securities from rising, Or by walking down the news that is not good for the company to drive down the price of the stock they want to buy) and options partnership (investors buy securities at a favorable price, which is usually obtained by opening up the company's board of directors, and usually returns privately from a part of the profit To directors).

4. Insiders manipulate the stock market. Because the management power of each company is in the hands of major shareholders, these people may manipulate the price of the company's stock by disseminating information about the company's profit, issuing dividends and expansion plans, acquisitions, mergers, etc .; or directly using inside information to make profits, such as in Before the company announces the news that is conducive to the rise of the company's stock price, buy it secretly and throw it at a high price when it is announced; if the company will announce unfavorable news, throw it secretly before the announcement and buy it at a low price after the announcement.

5. Stockbrokers and exchange staff cheat. When trading on the stock exchange, the cheating behavior of the stock broker may be upset (that is, buy on behalf of the client for a while and sell, or deliberately persuade the client to buy or sell quickly so that it can be obtained from each transaction (Commit commissions), misappropriate transaction commissions, misrepresent market prices, make unauthorized purchases and purchases to make profits for customers, or misreport customer defaults to earn transaction compensation. The cheating methods of the exchange staff may include: illegally buying and selling stocks in secret, collusion by stockbrokers, or secretly engaging in stock trading with stockbrokers.

Top 30 in world stock exchange market capitalization

As stocks gradually penetrate into our lives, the stock exchanges are getting closer and closer to our lives. Among the top 30 in the world stock exchange's market capitalization, the New York Stock Exchange ranks first in its strength. The top ten are: New York Stock Exchange, Tokyo Stock Exchange, Nasdaq Stock Exchange, Euronext, London Stock Exchange, Shanghai Stock Exchange, Hong Kong Stock Exchange, Frankfurt Stock Exchange Exchange, the Toronto Stock Exchange Group, the Madrid Exchange of Spain and the Swiss Stock Exchange.