FINANCIAL SYSTEMS AND SERVICE

CIA - Component 1

1
 INDEX

Sl. TOPIC Pg. No.

No.

1 Introduction 3-4

2 Stock exchange market- NYSE 5-6

3 Shanghai Stock Exchange 6-7

4 Toronto Stock Exchange 7-8

5 Six Swiss Exchange 9-11

6 London Stock Exchange 11-12

7 Australia Stock Exchange 12

8 National Stock Exchange 13

9 Saudi Stock Exchange 14

10 Frankfurt Stock Exchange 14-16

11 Korea Exchange 16-17

12 Conclusion 17-18

13 References 18

Introduction

Stock exchange is a market that brings together buyers and sellers to facilitate investment in
stocks. A stock exchange helps companies to raise capital or money by issuing equity shares
which are sold to investors, the companies invest those funds back into their business and
investors ideally earn and take advantage of their investment in those companies. The main aim

2
of stock exchange is to facilitate the exchange of securities between buyers and sellers providing
a market place.
The New York stock exchange is the most powerful stock exchange within the world, although
it's not the first stock exchange. It is said that in the 1300s Venetian moneylenders began to sell
debt issues to individual investors and other lenders. Later In the 1500s Belgium's exchange dealt
exclusively in bonds and promissory notes, as per the research it was found that Sans the stock is
the first stock exchanges, the real stocks were not present in 1500s there were only flavors of
business finance partnership which produced income as stocks do. In Amsterdam's courtyard the
first stock exchange (or Beurs van Hendrick de Keyser in Dutch) was formed, it is the world's
first formal stock exchange in modern sense, by the VOC managers and shareholders in the early
1600s. In the 1600s the emergence of various East India companies of Dutch, British and French
government issued stock, the mode of business was changed, there was also a dividend given to
the investors which had a financial boom. But later, it was found that some companies conducted
frauds and very little actual business was done. Hence, there was a financial burst. After all this
NASDAQ had started the actual competition. NASDAQ was formed in 1971, where the business
conducted electronically, which caused the NYSE (New York Stock Exchange) to evolve and
innovate in order to build its dominance as the premier global exchange. At present, the New
York stock exchange located at 11 wall Street in New York city is the world's largest stock
exchange.
A stock exchange also called a securities exchange is an exchange where traders and stock
brokers can purchase and sell securities (like bonds, stocks and other financial instruments). The
stock exchange works as a double- auction market, during which the essential forces of supply
and demand are fully vigorous. The buyers and sellers meet usually electronically and haggle
over the price of a particular stock. The stock exchange plays a major role in bringing sellers and
buyers together. Stock exchange standardizes investments which allows people to buy or sell
equal and discrete shares of ownership in various companies. Once after the seller and buyer
agree on a price the trade is made. Exchange provides liquidity in the market; they check
whether there are enough buyers and sellers so that trade can proceed efficiently without delays.
In stock exchanges, the stocks first become available on an exchange only after the companies
sell shares to an initial set of public shareholders in an IPO (Initial public offering) known as
primary market. Once the shares are in the hands of general public trade can take place in a

3
secondary market. Stock exchange keeps a track of trade and ensures that trading occurs in an
orderly and fair manner, so that the important financial information can be transmitted to
financial professionals and investors. In earlier Some exchanges and commodities are physical
locations where transactions are often administered on a floor by away called open outcry.
Which involves the traders shouting bid and offer prices. The other sort of stock exchange
features a network of computers where trades are made electronically for instance NASDAQ.
This increased the speed and reduced the value of transactions. Most stocks are traded through
brokers, so as an investor it's vital to understand the connection between exchanges and therefore
the companies that we trade.
Due to Covid-19 pandemic there was a financial crash that occurred in stock exchanges in fact
the stock market as a whole in March 2020. There was a huge fall in companies share prices. We
could see more ups and downs of share prices. The lives, businesses and economy as a whole has
seen a lot of changes due to this Covid-19. Some stock exchange listed companies and other
companies in the US had recovered from this crash by the end of 2020, while other countries
remained below their pre-covid peak. It is said that some types of financial markets saw
pandemic related developments which was a good sign in stock exchanges over 2020. The
investors in the US had more confidence in their economic growth. The fundamental trends show
that some companies listed or not listed in stock exchanges have turned into hurricanes and are
still struggling to recover from their loss due to Covid-19 impact. While, other companies
recorded speed in development.

THE STOCK EXCHANGE MARKETS

4
 NEW YORK STOCK EXCHANGE (NYSE)

New York Stock exchange is the Stock Exchange which is located in New York city. It has
created the world's largest and most trusted equities exchange and the world's most deterministic
trading technology. The President of NYSE is Stacey Cunningham and she is the second female
President of NYSE. The data provided helps the leaders and expertise to know the visionary’s
capitalization of its listed securities on opportunity in the public markets. Previously it was
running as a private organization and then it became a public entity on March 8, 2006 by the
acquisition of electronic trading exchange Archipelago. In 2007, a consolidation with Euronext,
the biggest stock trade in Europe, prompted the formation of NYSE Euronext which was
subsequently obtained by International Trade as the current parent of the NYSE. The market
capital of more than US$16 trillion. The trading hours are from 9.30 to 16.00.

History

The stock exchange evolved from a meeting by 24 stockbrokers under a buttonwood tree on May
17, 1792 on what is now called Wall Street in New York City. To many of the people, the name
Wall Street is known as the stock exchange. It was formally constituted as the New York Stock
and Exchange Board in 1817 and the present name was adopted in 1863. The Bank of North
America, First Bank of the United States and the Bank of New York were the first shares traded
on the New York Exchange.

NYSE Trading

When a company registers or associates with

the NYSE to raise capital, their company’s

5
shares and stocks become available to the public for trading. Traders interested to invest in the
stock market can buy and sell the stocks online through exchange companies. Exchanging
happens on the trading floor through Designated Market Makers and Floor Brokers. It’s
automated, with the exception of high-priced stocks, making the NYSE the premier hybrid
market where trades execute within a second when electronic whereas in manual trades it would
typically take nine seconds. Like the same trade runs in a continuous auction format. At the
present situation the investors have to find a brokerage who is a member of the NYSE. So, with
the help of the brokerage, they buy and sell the shares and other products that are provided by the
NYSE to brokerage. Around 20% of the industries represented are from financials and trusts,
insurance and others. Consumer goods and services, technology and telecommunications, gas
and oil are among the major industries covered by the NYSE. The market capital is 25 trillion
USD.

SHANGHAI STOCK EXCHANGE

The Shanghai Stock Exchange is the world's 4th largest stock market by market capitalization
where it’s located in China. It allows companies to raise money by offering shares and bonds.
This allows the investors to participate in the financial achievements of the companies, make
profits, capital gains and earn money through dividends, there are also chances of incurring
losses. The U.S. Securities and exchange commission ensures the market works efficiently. The
greater part of the all-out market cap of the SSE consists of once in the past state-run
organizations like significant business banks and insurance agencies.

History

Stock trading started in Shanghai as early as the 1860s. The first stock trading organization in
China was started in 1891 by American, French and British businessmen who founded the
Shanghai stock and share brokers Association. The association applied for company registration
in Hong Kong was renamed as Shanghai Stock Exchange. It was closed for 41 years during the
cultural revolution. The Shanghai Stock Exchange was established on November 26, 1990 and it
started formal operations on December 19 of the same year once again.

SSE Trading

6
The major socio-economic role of a stock exchange is the valuing of securities and the well-run
market place where investors can buy and sell shares. Purchasing stocks straightforwardly in a
market like India or China is conceivable, in spite of the fact that it very well may be more
earnestly than buying domestic offers. Financial backers can buy American Depositary Receipts
on U.S. trades, which are endorsements that represent the shares of the foreign company. There
are two main classifications of stock for every company listed on the SSE: A shares and B
shares. Shares in China are open for the foreign investors and companies to buy and sell. China
A shares are based on the companies that trade on the two Chinese stock exchanges that are
Shanghai Stock Exchange (SSE) and Shenzhen Stock Exchange (SZSE).

TORONTO STOCK EXCHANGE

The term Toronto Stock Exchange (TSX) alludes to a Canadian stock trade situated in Toronto,
Ontario. The trade is likewise home to global postings and trade exchanged products.1 It turned
out to be completely electronic subsequent to shutting its exchanging floor 1997.2 In 2007, the
TSX converged with the Montreal Exchange (MX) to shape the TMX Group. The Toronto Stock
Exchange is the biggest trade in Canada. The trade is completely electronic with in excess of
1,500 organizations recorded.

History

TSX was Established in 1861, the TSX is Canada's chief stock trade with in excess of 1,500
recorded organizations, including those from the energy, mining, innovation, and land areas. The
Toronto Stock Exchange is one of the biggest stock trades in the world and is the third-biggest in
North America after the New York Stock Exchange and the Nasdaq. The trade's set of
experiences traces all the way back to the mid-1800s. It was set up in 1861 and was formally
consolidated in 1878 under the name Toronto Stock Exchange or TSE. It became known as the
TSX after the organization was rebranded in 2002.

7
Special consideration

In 1999, the TSX turned into Canada's just trade for senior values. After two years, it procured
the TSX Venture Exchange, which essentially records little cap stocks. As verified over, the
trade is currently worked by the TMX Group, an aftereffect of the consolidation between the
TSX and the MX. Notwithstanding the TSX, the MX, and the TSX Venture Exchange, the
gathering additionally works the TSX Alpha Exchange, which has practical experience in fixed
pay items in Canada, and the Canadian Derivatives Clearing Corporation (CDCC). The CDCC
works by getting free from Canadian trade by exchanging subordinate items and other monetary
instruments.

Working of TSX

Toronto Stock Exchange and TSX venture exchange are Canadians leading public equities
market. The largest source of liquidity and pricing for Canadian’s securities, the exchanges are
also home to more than 3400 listed companies. TSX and TSXV work ceaseless closeout
advertisements that match singular orders with nonstop value revelation from 9:30 AM to 4:00
PM in a focal cutoff request book (CLOB). Opening sell-offs on the Exchanges are the most
fluid opening systems in Canada, and build up the authority opening costs for TSX-and TSXV-
recorded protections exchanging every single Canadian commercial center. TSX utilizes a
unique market making framework which expands liquidity, gives a two-sided market, and keeps
the power of a control driven consistent closeout market dependent on price time priority.

8
 SIX SWISS EXCHANGE

The SIX Swiss Exchange is Switzerland's essential stock trade, situated in Zurich. The SIX
Swiss Exchange exchanges Swiss government bonds, stocks and subsidiary items like
investment opportunities. It is among the world's 20 significant stock trades. The SIX Swiss
Exchange was once known as the SWX Swiss Exchange. It was the main stock trade to help
completely computerized exchanging, clearing and settlement, in 1995. Switzerland's other trade
is the more modest Bern trade.

The SIX Swiss Exchange conveys reasonable and straightforward exchanging values, securities,
supported assets, supported unfamiliar offers, trade exchanged assets (ETFs) trade exchanged
items (ETPs) and organized items. The trade utilizes the exchanging stage X-stream INET and
exchanges essentially in the Swiss franc (CHF). Exchanging hours are Monday-Friday 9am-
5:30pm.

Highlights in SIX SWISS EXCHANGE history-

Year 1995:

1.Switzerland's three stock trades (in Geneva, Basel and Zurich) converge to shape the SWX.

2.Electronic exchanging unfamiliar values starts

Year 1996:

1.Electronic exchanging Swiss values and choices is presented.

2.A completely robotized exchanging, clearing and settlement framework is introduced.

Year 1999:

1.SWX Repo, the world's first completely coordinated, electronic repo exchanging stage is
initiated.

2.The name "SWX Swiss Exchange" is presented.

Year 2000:

1.The ETF segment was launched

9
Year 2008:

1.SWX Repo, the world's first completely incorporated, electronic repo exchanging stage is
initiated.

2.The name "SWX Swiss Exchange" is presented

SIX SWISS Exchange stock market index

The SIX SWISS EXCHANGE ensures the following -

1.Liquidity in exchanging

2.Top notch exchanging innovation

3.Speedy affirmation and adaptable network choices

4.Solid exchanging conditions and a market-driven administrative climate

5.Admittance to a huge organization and master information

6.An effective posting measure, where an organization can open up to the world inside about a
month

Switzerland is viewed as one of Europe's innovators in development and is known for its
political and financial steadiness. It additionally stands firm on a top foothold in the biotech and
medications tech areas because of the useful communication between its biotech and drug tech

10
industry and Switzerland-based monetary organizations. The nation likewise leads in the
monetary administrations industry. Different worldwide area pioneers in the monetary and
protection spaces are addressed on the SIX Swiss Exchange.

LONDON STOCK EXCHANGE

London has long been one of the world's leading financial cities well known as a hub for
international trade, banking in insurance. History of the London stock exchange goes back to
1698 when broker John Casting began posting the price of a stock and commodities at
Jonathan's coffee House which was a popular meeting place for businessmen to conduct
trades. Casting called his price list "The course of the exchange and other things".

The main market

The main market of the London Stock Exchange is one of the most important and well-known
stock exchanges in the world, containing companies from various industries. Companies that list
on the LSE's main market have access to two things: real-time pricing, deep tools capital,
benchmarking through the FTSE UK index series, and a lot of media attention, research, and
announcements.

Playing by the rules

Trading is now governed by a complex set of rules, but at the beginning, there were no
defined guidelines. In 2018, the London Stock Exchange Group earned over £135 million, up
from 1955 million the previous year. In February 1812, the general-purpose committee
accepted a set of recommendations that became the first codified rulebook.
Big Bang

The Big Bang occurred on October 27, 1986. The deregulation of the financial markets in the
United Kingdom was given this moniker. On May 1, 1975, the New York Stock Exchange was
deregulated for the first time in just over ten years.

11
The London Stock Exchange leads the world in initial public offers (IPOs).

AUSTRALIA STOCK EXCHANGE

Sydney, Australia is home to the Australian Securities Exchange. In 1999, the Australian Stock
Exchange and the Sydney Futures Exchange

merged to become the Exchange in its current form. The ASX serves as a market maker, a
clearing house, and a payment processor. It also supplies retail investors with educational
materials.
On March 27, 2006, the Australian Stock Exchange, which was created in 1987, announced its
approved cash-and-stock offer for the SFE, seven years after an unsuccessful takeover was
vetoed by domestic antitrust officials and a rival offer was withdrawn. The offer of 0.51 stock
exchange shares for each SFE share valued the futures exchange at A$2.3 billion-, or 31.5-
times earnings in 2006.

Charts of the ASX Index and Share Prices. The ASX All Ordinaries Index (XAO), the
S&P/ASX 200 Index (XJO), the S&P/ASX Small Ordinaries Index (XSO), Commonwealth
Bank (CBA), BHP Billiton (BHP), RIO Tinto (RIO), Telstra (TLS), and other Australian

12
stock market related charts are among the charts available. There are additional charts for
ETFs (Exchange Traded Funds) that are listed on the ASX.

NATIONAL STOCK EXCHANGE

National Stock Exchange, India Limited is the leading stock exchange of India, situated in
Mumbai, Maharashtra. It is under the control and management of some leading financial
institutions, banks, and Insurance companies. NSE was established in 1992 as the first de-
materialized electronic exchange in the country. And indices include NIFTY 50 and NIFTY 500.
Girish Chandra Chaturvedi as the chairman, and Vikram Limaye as the MD and CEO of NSE.

NSE was incorporated in the year 1992. It was recognized by SEBI in April 1993 and
commenced its operations in the year1994 with the launch of the wholesale debt market segment.
In the year 1995, it launched NIFTY 50 index commercial trading the settlement in
dematerialized securities. In 1997 it established NSE indices limited as a subsidiary, as a joint
venture with Crisil Ltd to operate indices business. In 2004, they launched NIFTY bank index
derivatives. In the year 2007, NSE became the first exchange in India to offer to trade in the
currency future. In the year 2009, they launched a mutual funds service system and NOW
platform for mobile devices. In the year 2014, NSE signed an MOU to enhance cooperation with
the London stock exchange group. It has entered into an MOU with Colombo and London stock
exchange. In the previous year, NSE launched a new brand and identity for NIFTY indices and
was declared the world’s largest derivatives exchange in 2019 by WFE. 

13
  

SAUDI STOCK EXCHANGE or TADAWUL

Saudi Stock Exchange is a stock exchange in Riyadh, Saudi Arabia. Tadawul was formed in
2007 as a joint-stock company, and the sole entity authorized to act as a securities exchange in
Saudi Arabia. Still, trading began in 1954 as an informal financial market. The Saudi Public
Investment Fund completely owns Tadawul. Tadawul completely owns Muqassa & Edaa but
only owns 20% of the Tadawul Real Estate Company. The Tadawul All-Share Index (TASI)
reached its highest point at 20,634.86 on 25 February 2006. Saudi’s stock exchange is the largest
in the Middle East.Sarah al suhaimi is chairman and Kahid abdullah al hussan is CEO.

This Exchange carries out listing and trading in securities for local and international investors.
Saudi Exchange is the 9th largest stock market with 67 members of the World Federation of
Exchanges and is the dominant market in the Gulf Cooperation Council (GCC). It is also the 3rd
largest stock market amongst its emerging market peers. The number of listings is 202 in the
Tadawul stock exchange.

FRANKFURT STOCK EXCHANGE

By market capitalization, the Frankfurt Stock Exchange (formerly Frankfurter Wertpapierbörse -

FWB) is the world's 12th biggest stock exchange.

14
The Frankfurt Stock Exchange is owned and run by Deutsche Börse AG and Börse Frankfurt
Zertifikate AG and is located in Frankfurt, Germany. It's in the Innenstadt area, which is part of
the Bankenviertel core business district.

The Frankfurt Stock Exchange is the largest of Germany's seven regional securities exchanges,
with 90 percent of its volume produced in Germany, namely at the two trading venues Xetra and
Börse Frankfurt.

Xetra is the German stock exchange's reference market for trading stocks and exchange-traded
funds. In 2015, the Xetra accounted for 90 percent of all stock trading on all German exchanges.

With over one million shares of German and foreign issuers, Börse Frankfurt is primarily a
trading platform for individual investors. On the trading floor, so-called "specialists" handle
securities trading.

Trading at the Frankfurt Stock Exchange is controlled by a set of explicit regulations that apply
to all traders equally. The Trading Surveillance Office (HÜSt), the Exchange Supervisory
Authority affiliated to the Hessian Ministry of Economic Affairs, Transportation, and Regional
Development, and the Federal Financial Supervisory Authority provide independent market
surveillance (BaFin).

Several protection procedures are in place for the trading venues Xetra and Börse Frankfurt in
order to improve price consistency and minimize mis trades. Volatility interruption, market order
interruption, and liquidity interruption are examples of these techniques.

The Frankfurt Stock Exchange has its roots in mediaeval trade fairs from the 11th
century. Frankfurt had grown into a prosperous and bustling metropolis focused on commerce
and financial services by the 16th century.

The 'birth' of the stock exchange is thought to have occurred in 1585, when a bourse was formed
to establish fixed currency exchange rates.

Frankfurt, along with London and Paris, became one of the world's first stock markets in the
following centuries. Mayer Amschel Rothschild and Max Warburg, for example, had a
significant impact on Frankfurt's financial commerce. From the early 1960s until the adoption of
the euro in 2002, the Frankfurt Stock Exchange took advantage of the close proximity of the

15
Bundesbank, which essentially ruled on financial policy in Europe. Since then, the presence of
the European Central Bank in Frankfurt has benefited the exchange.

In 2002 and 2004, Deutsche Börse was in advanced talks to buy the London Stock Exchange,
however the talks fell through in 2005. In 2017, the European Commission rejected a new
merger proposal.

KOREA EXCHANGE

The Korea Exchange (KRX) is the country's only securities exchange. Its headquarters are in
Busan, with a cash markets and market supervision office in Seoul.

Under the Korea Stock & Futures Exchange Act, the Korea Exchange was formed by combining
the Korea Stock Exchange (KSE), Korea Futures Exchange, and KOSDAQ Stock Market.
Former exchanges' securities and derivatives markets are now part of Korea Exchange's Stock
Market Division, KOSDAQ Market Division, and Derivatives Market Division. Korea Exchange
has 2,409 listed firms as of December 2020, with a total market capitalization of 2,314 trillion
KRW ($2.1 trillion USD). On all days of the week, save Saturdays, Sundays, and holidays
specified in advance by the Exchange, the exchange operates standard trading hours from 9:00
a.m. to 3:30 p.m.

The Korea Exchange joined the United Nations Sustainable Stock Exchanges project on May 22,
2015, in a ceremony attended by UN Secretary-General Ban Ki-moon, as well as top officials
from the UN Global Compact and UNCTAD.

Traded Instruments

*Stocks

*Bonds

*Exchange Traded Funds (ETFs)

*Exchange-Linked Warrants (ELWs)

*Real Estate Investment Trusts (REITs)

16
KOSDAQ Market Division

*Stocks

Derivatives Market Division

*Index Instruments: KOSPI 200 Index Futures, KOSTAR Futures, KOSPI 200 Index Options

*Single Stock Futures

*Equity Options

*Interest Rate Instruments: 3-Year KTB (Korea Treasury Bond) Futures, 5-Year KTB Futures,
10-Year KTB Futures

*Foreign Exchange Instruments: USD Futures, JPY Futures, EUR Futures, USD Options

*Commodity Instruments: Gold Futures, Mini-gold Futures, Lean Hog Futures

CONCLUSION

What began with a mere intention to build a large-scale business, but a single merchant couldn't
raise the sum of capital alone resulted in a group of investors pooling in their savings and
becoming business partners and co-owners with individual shares in the business. This idea was
just the beginning of a new concept that took over worldwide. The convenience of this
exchangeable medium allowed shareholders to conveniently buy, sell and trade their stock with
other shareholders and investors. The idea was so successful that the selling of shares spread
globally. As the volume of the shares increased, the need for an organized marketplace to
exchange these shares became necessary. Hence robust stock exchanges emerged.

The current global recession has indeed affected and slowed down the progress of the emerging
markets. However, these markets are expected to gain market share in the coming decades as the
economies grow and new firms go public and raise capital to serve a growing class of
consumers. Hence continue to grow into the worldwide network of exchanges.

Having learned and created this report, my team and I became familiar with the different stock
exchanges prevalent in the world. Understood their working, emergence, and the importance of

17
the position they hold on a global scale. We have gained so much knowledge on how beneficial
the stock exchanges in each country are in helping companies and economies grow together. The
different exchanges existing worldwide have a similar working structure. They are involved in
trading a variety of financial instruments that create a platform of mutual benefits for the
investors and borrowers. They have evolved from a manual trading system to an electronic
system at the convenience of all its users. This system has benefited both parties to raise more
capital, and save and invest more in their most trusted companies. Thereby, in the end, all
resulting in economic growth and development of the country. Every stock exchange is emerging
and striving to be better and prominent each day, and hence the future growth prospects are
immense despite the current covid impacts causing a slight recession.

REFERENCES
https://www.mckinsey.com/business-functions/strategy-and-corporate-
finance/our-insights/the-impact-of-covid-19-on-capital-markets-one-year-in
https://www.investopedia.com/terms/s/six-swiss-exchange.asp
https://www.investopedia.com/terms/t/toronto-stock-exchange-tsx.asp
https://www.investopedia.com/articles/basics/04/092404.asp
https://www.finder.com/uk/invest-in-shanghai-stock-exchange
https://www.britannica.com/topic/New-York-Stock-Exchange
https://www.nseindia.com/
https://www.saudiexchange.sa/
https://www.theguardian.com/business/2019/aug/01/london-stock-exchange-
over-300-years-and-counting
https://www.investopedia.com/terms/a/asx.asp
https://tradingeconomics.com/south-korea/stock-market

18