A stock exchange market is a place where business activities take place. The New York Stock Exchange (NYSE) and the National Association of Securities Dealers Automated Quotations (NASDAQ) are examples of stock exchange markets. The stock exchange market is controlled by specialists and dealers who are market makers (Ellen, 2010). Brokers usually go to the specialists or dealers and present their request to either sell or buy shares at a certain price. The specialists and brokers then match a broker’s request with another one to facilitate trade. When there is no broker who matches any of the requests, the specialist buys or sells the shares (Sobel, 2008). This process continues and becomes the business of the stock exchange market.
We will write a custom Essay on The Stock Exchange Market Features specifically for you
301 certified writers online
The movement of buyers and sellers in both exchange markets is controlled by police to reduce traffic that may develop in case of no order. Both the specialists and the dealers in both exchange markets determine the flow of shares. The shareholders in both exchange markets benefit from obtaining profit from the sale of shares. Also, since both exchange markets are now public entities, they are bound by the rules set out by the Securities and Exchange Commission (Sobel, 2008).
The two stock exchange markets are different from where they take place. The NYSE takes place in a physical locality within the city of New York while NASDAQ is located on a telecommunication web site on the internet. The NYSE involves an auction process whereby the customer with the highest bidder is allowed to buy the shares while in the NASDAQ dealers are involved to determine the buyer.
Another difference is that NASDAQ involves dealers who look for the market for the orders while the specialists in NSYE facilitate the trade in the stock exchange market. NASDAQ is regarded as a new form of stock exchange because its physical market is found online while NYSE is considered as an old form of the stock exchange with a physical market located in one area. Ownership of shares in the two exchange markets forms the other major difference between NSYE and NASDAQ. Initially, NASDAQ was a public entity while NSYE was a private entity but both exchange markets are now public entities (Ellen, 2010).
The Public Company Accounting Reform and Investor Protection Act of 2002 were enacted by the Congress Assembly in August 2002 to form an oversight board to control the registered public accounting firms and associates (Randal, 2004). The board is authorized to change accounting laws at five years intervals. This oversight board gives sanctions, supervises, and advises the firms on important decisions to make. Other roles of the board include adjusting the Security Act to be in line with the new security laws and globally accepted accounting principles.
It also approves the audit committee of an accounting firm and gives the executive officer of that firm the power to determine the authenticity of compulsory financial statements and control a quittance of compensation from penalties in accordance with the security laws. The board also has the authority of controlling trade during the pension fund blackout periods, regulates the period for disclosure of changes in security ownership by shareholders, and enforces the SEC rules. Finally, the board also enforces the rules for balance sheet transactions, sets proper accounting principles for pro forma in formations, and guarantees loans for the boards’ officials (Geisst, 2004).
Ellen, T. ( 2010). “History of the New York Stock Exchange”. 59 (3): 234-254. Web.
Geisst, Randal, C. (2004). “Wall Street: A History – From its Beginnings to the Fall of Enron.” New York: Oxford University Press.
Sobel, R. (2008). “N.Y.S.E.: A History of the New York Stock Exchange, 1935–2006”. 22 (1):111-122. Web.