QS Study

Objectives of Stock Exchange

The stock exchange is the index of the economy of a country. It is the center of the capital market. It is called the economic mirror of a country. It is called share market interchangeably. In developing trade, commerce and industries in a country stock exchange play an important role. The objectives of establishing stock exchange are mentioned below:

To supply capital: It is established to supply the required capital for companies of a country

To inspire savings: This inspires people to save their income by making a profit. It accumulates the individual income and yet they go to the industries to the economic development of a country.

To trade financial instruments: It is established to trade the financial instruments for individual investment and company collect capital.

To develop economy: It helps economic development by supplying capital to the industries. It is an important objective of the stock exchange.

To present information: Another objective of the stock exchange is to present information about transactions and financial conditions of the companies.

To do long-term financing: Commercial banks generally disburse the short-term loan. So, supplying long-term finance is an objective of the stock exchange.

To raise awareness: It raises awareness among the general people by giving information than to invest and gain profit from the market.

To have a fair operation: To transact the financial instruments easily and fairly stock exchange is established. So, it is a duty of stock exchange to secure both investors and borrower.

To protect fraudulently: It is also to ensure that no fraudulence occurs in a transaction. By this means the evils can deceit the tender investors and the stock are liable for protecting that.

Convenience: The objective of the stock exchange is to formulate policies for easy transactions and safety of the investors and companies.

So, the objectives of stock exchange are great and efficient operations of stock exchange are so much required for the economic development of a country.

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