STOCK EXCHANGE 1.

Defining The stock market is one of the most important institutions of a market economy, one segment of the financial market, an organized secondary market, transparency and surveillance, which ends on securities transactions, derivatives, money. Securities (financial securities) that constitute the primary object of the contracts to be concluded on the stock exchange is financial savings, unused avaibility in the negotiations that are forwarded to the most productive economic activities. The stock market appears to be a regulator of financial flows, a stimulator of the diversified and profitable production, and a detector of production unprofitable. Whatever its legal form, which can be public or private law, stock exchange and operates under the control of government surveillance. Internationally, in most states operate as private market that limited companies. Grants are public non-profit nature of the state administration. Stock Exchange established in Romania in 1994 is a public institution 2. The purpose of the Stock Exchange The stock market is a bargain: a) Securities (securities): stocks, bonds, treasury bills and tickets, securities, annuity, etc.. b) Currency selective. c) exchange derivative products: futures contracts, commodity options, options on securities, options on currencies, stock index options, options on interest rates, etc.. There are stocks to the main object of the negotiations is the action. These stocks are also called stock market. Some concern the stock exchange securities trading activity locally and they are local

scholarships, uncharacteristic in international stock trading, others have an extended object from a large number of securities admitted to listing, regardless of the issuing country.These stock markets are characteristic of international reputation, holding a leading role in the overall stock market transactions. 3. The essential conditions for the establishment of a stock exchange For establishment of a stock exchange are required three conditions: a) the existence in or near the area of large-scale liability companies; b) distribution of shares and bonds issued by companies that liability to a large number of shareholders; c) transactional activity unregulated by rules of law binding on the code of conduct, limiting the participation, the development of negotiations, etc. 4. The essential purpose of the Stock Exchange The stock market serve mainly to facilitate the accumulation of funds necessary for financing economic activity and to direct the flow of funds raised for the most profitable economic sectors.She mostly plays his role in the sale and purchase of shares and bonds issued by joint stock companies. Those who wish to become part owners and unlimited risks and buy stocks beneflcii simple, those who are unwilling to take risks and benefits with an unlimited buy preferred shares and fixed income with a minimal risk, and those who do not want to become owners but only creditors, decreasing the risk to the full, buy fixed income bonds with a coupon it called the percentage. The order in which the issuing company distributes benefits: money from the sale results have three kinds of financial effects of the issuing company are used for productive investments, purchases

of raw materials, labor hiring, pay, etc. economic management. In conditions in which economic activity takes place normally result that total revenues diminish labor costs (which come and debt repayment) and get working profit. Profit sharing is part of the work in the following order of priority: - The coupons are paid obligaliuni; - What remains to pay taxes on income or turnover; - Net profit is called the left and is divided between co-owners, namely between the shareholders. And the net profit distribution follows an order of priority: - First revenue is paid to preferred shares; - The remainder is divided in two: the simple payment of dividends on shares and shares subject to the establishment of new investment (or under statute)

5. Classification of Stock Exchanges From the legal point of view are distinguished: a) is the official stock exchange market which is negotiable securities admitted to listing. Operations are conducted in a specially equipped operating under a regulation. Transactions are centralized and accessible to continue informing the clients. The operations are carried out with only the mechanism, using a specialized staff in negotiating transactions and technical personnel in charge of preparing the negotiations, contracts and track record of their achievement. Access is restricted stock. Official stock exchange may be: - Classical - Modern The traditional stock exchanges form a single rate, centralized bargaining process is subject to regulation since the operation, that is directed and supervised fonnndu prices based on public auction.

In modern stock exchanges, negotiation processes are automated, electronic-based computers and, exclusively or in combination with conventional means. b) The stock exchange is an informal exchange with a less restrictive access. On this market is negotiable securities not listed on the official quotation. It's small and medium sized companies wishing to raise funds for development but can not meet the rigorous requirements for admission to the official market. Besides this, the unofficial stock we have: - Companies removed from official quotation; - Companies in difficulty, such as those undergoing dissolution and liquidation, etc.. c) Market at the counter (OTC - Over The Counter) market is held directly between operators outside organized exchanges that take place via a telecommunication network. In this market you can buy and sell securities in amounts as small packages of shares not only be based on a unit. Prices, though it forms the basis of the rates quoted on stock exchange are different, ranging from one company to another. In terms of how negotiation can be distinguished: a) Retail Market, the transaction is completed securities denominated in one or more units, determined by regulation. b) the wholesale market or wholesale, is the subject of major transactions, negotiations of blocks of securities, which involve strong intermediaries, owners of large stocks of securities, in the absence of significant buyers. In terms of delivery of the securities are distinguished: a) the cash market (spot) market, also called "spot". It is concluded

that the market for immediate delivery transactions (technically, in a few days after closing) with immediate adjustment, as appropriate; b) market time is olso known as market futures. In this market, or contracts with delivery time adjusting, as appropriate. The special shape of the futures market is the regulatory and market monthly. 6. Supervision and control of the negotiations on the stock exchange It is to review and supervision of the stock market in order to protect the interests of investors, is achieved by imposing the power of government to public information rules and norms that guide the professional activities of brokers and financial firms . I noted the following duties of government control: - Registration of scholars and their authorizing agents; - limiting the volume of transactions per agent and per unit of tine; - Control sums up in storage; - Ensure fair competition through continual supervision; - Issue autotizatii to acquire membership of the exchange or clearing house.