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The role of a Stock Exchange


A stock exchange allows companies to raise funds by providing them with access to a pool of private and institutional investors. 
The role of an exchange is therefore to:

1. Bring companies and investors together
2. Enable issuers and companies to raise new capital
3. Facilitate the process of investors subscribing in shares (securities)
4. Provide capital to companies and investors

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This is the function of Primary markets

 A stock exchange also performs other roles. In particular, it:

5. Facilitates
 - trading in securities after the IPO
 - buying and selling of securities between investors
6. Organises and oversees a fair and efficient market
7. Ensures an efficient price discovery process (the process of determining the price of the securities in the market place)
8. Provides timely and accurate trading and company disclosure information to inform private investor trading



 

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