1. Characteristics of the securities trading market
securities trading market refers to the place where securities issued and subscribed by investors are transferred, bought, and sold, also known as the secondary market or secondary market of securities. The securities exchange market is one of the indispensable and important components of the securities market. The securities exchange market provides the conditions for trading and realization of securities issued in the primary market and is an important guarantee for the maintenance and development of securities issuance. In a certain sense, the securities trading market is the soul of the entire securities market and the embodiment of the vitality of the securities market.
(1) Extensiveness of participants in the securities trading market The main participants
in the securities issuance market are issuers, while the main participants in the securities trading market are investors. Investors are composed of government departments, investment banks, commercial banks, securities companies, trust companies, investment companies, financial companies, and the general public. In the primary market, to become a securities issuer, one must go through a strict qualification examination, while investors in the secondary market can generally participate in the circulation market activities without passing the qualification responsibility examination. Minimum limit. Issuers can repurchase their own securities in the circulation market and become part of investors; in the trading market, anyone with a certain amount of funds can also participate in investment activities and buy and sell securities. Of course, most investors are Participating in securities trading activities in the securities exchange market through brokers.
(2) The multi-level nature of the securities trading market The
securities trading market is a multi-level market in front of the public. There are both national and unified trading markets, as well as regional and local trading markets; An over-the-counter market without a fixed trading place and venue. Different trading markets adapt to different levels of securities trading activities so that a wide variety of different securities can find suitable places for their trading, thereby also meeting the objective requirements of high liquidity of securities, making the securities trading market smooth, developed, and flexible. And orderly, objectively, it also supports and promotes the development of the securities issuance market.
(3) Standardization of securities trading methods and modernization of means
Securities trading activities can be carried out in different trading markets, but the trading rules implemented and the trading methods used are basically the same in different markets, especially the trading behaviors under a certain trading method are standardized. Because securities trading can easily lead to speculation and financial disorder, to prevent financial disorder, protect the legitimate rights and interests of investors and reduce the risks of securities financing and investment, securities trading markets around the world, especially stock exchanges, have formulated trading methods and The rules of trading behavior restrict the behavior of participants to ensure the stability of the trading market. At the same time, to quickly facilitate securities transactions, the securities exchange markets use computer network systems to assist transactions, use modern communication facilities, release securities transaction information and price changes promptly, and store securities transaction materials. Development of the stock market.
(4) Uncertainty of transaction time and uncertainty of transaction price
In the stock exchange, the transaction time is strictly stipulated, rather than determined according to the needs of securities sellers or buyers. For example, the trading hours of a stock exchange are indicated by the opening hours. my country’s Shanghai Stock Exchange and Shenzhen Stock Exchange stipulate that the market is open every Monday to Friday, and the daily opening time is 9:30-11:30 in the morning for the front market and 13:00-15:00 in the afternoon for the aftermarket. Unlike the issue price in the issue market, the transaction price in the securities exchange market can be determined in advance and sold at the determined price. The price of securities trading is affected by the operating conditions of securities issuing companies, the supply and demand conditions of the securities market, and various social, political, economic, and other complex factors.
(5) Continuity of transactions in the securities exchange market
The circulation characteristics of securities are fully reflected in the securities trading market. This is mainly manifested in: first, the sale or transfer of securities in the trading market does not necessarily have to be a transaction that has been exchanged between the holders of the coupons and money. If this is required, it is the spot trade. However, at present, a large number of futures transactions, options transactions, and stock price index transactions in the securities trading market are transactions of several stocks, which can be traded several times before delivery. That is to say, when someone owns a certain right to security without actually holding it can be sold, and for the buyer, the purchase is the right, thus allowing the security transaction to continue without interruption. Second, securities transactions are continuous in time. At present, the world stock exchange market has formed a market that can carry out continuous trading business 24 hours a day. From the international dateline, the Tokyo Stock Exchange was the first to open, followed by the Hong Kong Stock Exchange and the Singapore Stock Exchange, followed by the Zurich Stock Exchange, and finally the Chicago Stock Exchange, the New York Stock Exchange, and the United States. stock exchange market. They are connected in a line in time and area, often forming the closing market of one market and the opening market of another market. Other trading conditions have become one of the important bases for the next market transaction. It is precise because of the continuity of transactions that the gap between securities prices in various securities trading markets is getting smaller and smaller.
(6) Speculative nature of securities trading market transactions
Transactions in the stock exchange market are speculative to a certain extent and are triggered by stock exchange prices. Commodities on the stock exchange market, like other commodities, have a difference between the buying and selling prices. As long as there is a transaction in the securities trading market, there will be a price difference, and if there is a price difference, there will be speculation, especially if the transaction is not delivered immediately, which creates conditions for speculation in the securities transaction. In addition, the expectation of fluctuations in the price of securities transactions also increases the possibility of speculation in securities transactions. There are two types of people who speculate in the securities trading market. One is those who specialize in speculative transactions. They rely on short-selling and short-selling to obtain profits from the price difference between the transaction price and the time of delivery; the other is those who mainly engage in investment transactions. While making investments, they are driven by the pursuit of profit or other psychological motives to engage in some speculative business to protect their own interests to make their own profits larger. Speculation in the securities trading market is unavoidable, but it cannot be left unchecked. The state must strengthen management following the law to prevent excessive speculation from impacting the normal trading of the trading market and disrupting the order of the securities market. Countries in the world’s major securities exchanges have adopted a series of economic regulations such as commercial law, company law, securities exchange law, financial law, bankruptcy law, etc., to regulate securities market transactions, restrict excessive speculation, and ensure orderly market transactions.
2. Types of Securities Trading Market The
securities trading market consists of two parts: one is the on-exchange market, namely the stock exchange, which is a highly organized market and the main body and core of the securities market; The over-the-counter market is a necessary complement to the stock exchange. In addition, there are the third market, the fourth market, etc., but in fact, they still belong to the over-the-counter market.
(1) Stock Exchange
1. Definition and characteristics of a stock exchange A
the stock exchange is a place where securities buyers and sellers trade publicly. It is an organized, fixed location, and centralized securities trading market. The stock exchange itself does not buy and sell securities, nor does it determine the price of securities, but provides certain venues and facilities for securities transactions, equips necessary management and service personnel, and conducts careful organization and strict management of securities transactions. Transactions proceed smoothly to provide a stable, open, and efficient market.
As a highly organized tangible market, stock exchanges have the following characteristics:
(1) There are fixed trading venues and strict trading hours;
(2) The participating traders are securities operating institutions with membership qualifications, and the transaction adopts a brokerage system, that is, ordinary investors cannot directly enter the exchange to buy and sell securities, and can only entrust members Indirectly trade as a broker;
(3) The trading object is limited to listed securities that meet certain standards;
(4) The trading price is determined by public auction;
(5) The trading volume is concentrated, with high transaction speed and transaction rate;
( 6) Implement the principle of “openness, fairness, and justice” and strictly manage securities transactions.
To establish a stock exchange in a country or region, the following conditions must be met: ① There must be a sufficient variety and quantity of stocks and bonds that can be listed and traded; ② There must be a considerable number of investors and fundraisers; ③ There must be a certain number of, Well-trained intermediary brokers in terms of professional ethics and business ability; ④ There must be a considerable amount of social idle funds, and allow free flow of funds; ⑤ There must be a certain scale and equipped with advanced computing and communication equipment. There must be more mature management institutions, management talents, and more complete regulations on securities.
Only after meeting the above conditions and obtaining the approval of the government and relevant administrative departments, can a stock exchange be established.
2. The organizational form of the stock exchange mainly includes the company system and the membership system.
(1) Corporate stock exchange
A corporate stock exchange is a corporate body established in the form of a joint-stock limited company to make profits. It is generally formed by financial institutions and various private companies. The Articles of Association of the Exchange clearly stipulate the number, qualifications, and duration of the company as shareholders of securities brokers and securities dealers. It must abide by the provisions of the company law of its own country, and under the management and supervision of the government securities authority, it absorbs all kinds of securities for listing, but its own shares are transferable but not allowed to be listed and traded on this exchange. At the same time, no shareholder, officer, or employee of any member company can serve as an officer of the stock exchange to ensure the fairness of the transaction.
The participants of the corporate stock exchange mainly include securities brokers and securities dealers, and they are in a contractual relationship with the exchange. Securities firms that enter the market to buy and sell securities must sign a contract with the exchange and pay the operating margin, and the exchange will collect securities listing fees and transaction fees under the law. The advantages of a corporate stock exchange are: it can provide complete trading facilities and services, and because it is not allowed to participate in any securities trading, but is participated by securities dealers who have a contractual relationship with the exchange, thus ensuring the fairness of securities trading. . The disadvantage of a corporate stock exchange is that its main profit comes from a certain percentage of the trading volume, and the cost is relatively high. To increase revenue, exchanges may artificially cause securities speculation, promote the development of securities transactions and disrupt the market. Accordingly, to avoid the expensive listing fees and commissions of corporate exchanges, securities buyers and sellers may transfer-listed securities to the over-the-counter market for trading.
(2) Member-based stock exchange
A member-based stock exchange is a not-for-profit social legal entity formed by the voluntary investment of securities firms that become its members. The General Assembly and the Council are the decision-making bodies of the membership stock exchange. The General Assembly is the highest authority and decides the basic policy of the exchange. The board of directors is the executive body, and its main responsibilities are: reviewing membership qualifications; deciding the number of members; drafting the articles of association of the exchange by the Securities and Exchange Law, submitting it to the general meeting for approval, and submitting it to the relevant departments for approval; reviewing and deciding on the listing and quotation of securities; It is stipulated that regular member meetings are held to deal with some major issues of the exchange and other daily affairs. For members who violate laws and rules and regulations of the exchange, the exchange will punish them, which is the so-called “self-discipline” spirit.
Different from the corporate system, each member (securities dealer) participating in the operation of the exchange can participate in the securities trading and delivery in the securities exchange, and only the members can enter the exchange hall to conduct securities transactions, and others must buy and sell securities listed on the stock exchange. , must be done through membership. The exchange is jointly operated by members, mutually restrained, and implements a high degree of self-management. Therefore, the member and the exchange are not in a contractual relationship, but an autonomous self-discipline relationship. The members of the stock exchange are mainly securities brokers and dealers, and there is also a member with special functions, called professional members.
Securities brokers refer to securities dealers who specialize in buying and selling securities on behalf of clients in the securities trading market, acting as an intermediary for both parties to the transaction and obtaining commission income from them. It is a major participant in the securities trading market and plays an extremely important role in the securities market.
Securities dealers, also known as “securities dealers”, are securities dealers who buy and sell securities for themselves in the securities trading market, earn income from the price difference, and bear the trading risks themselves. The main business scope of securities dealers includes: buying and selling listed securities on their own; acting as a subscriber for company shares or an applicant for corporate bonds; and concurrently trading in fractional shares of listed stocks.
Professional members are more popular in the United States and are exchange members who specialize in buying and selling one or more stocks on the exchange. Its responsibility is to maintain a free, continuous market for the stocks concerned. The trading objects of professional members are other brokers, and according to regulations, they cannot directly trade securities with the public. Professional members can participate in the securities trading business either as a broker or as a dealer, but they cannot participate in securities trading at the same time.
The advantages of a membership-based stock exchange are: because the exchange adopts a member self-discipline system, the transaction fee is low, it can prevent the over-the-counter trading of listed securities, and it is easy to balance the management of the exchange. The disadvantage of a member-based stock exchange is that because the members who operate the transaction are the participants in the securities transaction, injustice in the securities transaction is inevitable. my country’s Shanghai and Shenzhen stock exchanges both implement a membership system.