The organizational structure of the stock exchange
Stock Exchange is among private exchanges. This means that trade on the securities can only its members. Stock Exchange is a non-profit organization, it is in its interest to those who are professionally engaged in securities. That is why in Russian legislation stipulates that members of the stock exchange any securities market professionals. In Russia to professional securities market participants are commercial banks, so that they can be members of the Exchange. With commercial banks, typically the most active members of the Exchange. Although it should be noted that not all countries commercial banks allowed to Exchange or, on the contrary, they tip. For example, in 1993, 79% stake in Frankfurt Stock Exchange owned by domestic commercial banks and foreign banks to 10%. Members of the Russian stock exchanges are usually legal persons. In international practice, you can select different attitudes to category members of the stock exchange. In some countries, the preference is given to individuals (United States), the other is legal (Japan, Canada), the third (the majority) — no distinction between natural and legal persons.
In most States in the activity of exchanges are allowed to participate to foreign natural persons and legal persons who meet the requirements. At the same time, in some countries (Canada and France) foreign individuals cannot be members of the Exchange or their participation in the authorized capital stock is limited. Russian legislation expressly this question has not been addressed.Requirements for members of the Exchange are established as law and exchanges. Usually, the laws are only general requirements for membership in the Exchange, and vnutribirževye instruments have additional requirements. For example, the Exchange may determine the need for maintenance in the charters of organizations applying for membership, declaring the right articles, operations with securities, as well as the mandatory availability of qualification certificates for individuals to represent them on the stock exchange. Exchange enables its members to:
participate in the General meetings of the Exchange and management of its affairs;
to elect and be elected to organs of management and control;use the Exchange property, available information and any services it provides;
trading in the stock exchange as their own name and for their own account (when acting as dealer) and on behalf of and for the account of the client (to act as a broker):
participate in and receive the remaining after the Elimination of the Exchange property.
However, Exchange determines the obligations of the members of the Exchange. They should:
abide by the Charter of the Exchange and other vnutribirževye normative documents;
contributions and additional contributions in accordance with the size and means provided by the statutes and regulations;
to Exchange in the implementation of its activities.The stock exchange to fulfil its objectives, it must have an effective organizational structure that could provide not only lower costs related to the sale of securities, but also market liquidity, a sufficient number of buyers and sellers, bidders the necessary and correct information as past prices and volume of concluded deals and current prices of the seller and of the buyerthe volumes and types of securities. The organizational structure of the Exchange should also ensure the credibility of its members, i.e. it should have a democratically elected Government.
Therefore, Exchange is seen as a self-regulatory organization, operating on the principles of self-government. This is illustrated by the fact that current legislation Exchange itself decides on the Organization of his Office, which is reflected in its Charter.
In accordance with Russian legislation stock exchanges established in the form of non-commercial partnership. Therefore, Governments are divided into public and fixed structure.General meeting of Exchange members is the supreme legislative body of Government. Meeting of members of the Exchange are the annual mandatory convened once a year with an interval between them no more than 15 months, and extraordinary (Special). The latter shall be held at the Exchange Committee (Board), the auditing Commission or members of the Exchange, with not less than 10% of the vote.
According to current legislation within the exclusive competence of the general meeting are:
to provide guidance to the Exchange and the stock exchange trade;
determination of goals and objectives, the strategies for development;
adoption and amendment of the vnutribirževye normative documents;
the formation of elected bodies;
consideration and adoption of the budget, the annual balance sheet,
profit\/loss statements, distribution of profits;
admission of new members;
approval of the cost estimates for the maintenance of the Committee (Board) and staff exchanges, including the definition of the conditions of remuneration of officials of the Exchange, its branches and representative offices;
the decision on the termination of the Exchange, the appointment of a liquidating Commission, approval of the liquidation balance.Since the meeting of Exchange members meets once a year, for operative management Exchange selects the Exchange Council. It is the administrative body of the current management of the Exchange and its solves all activities, except those that can only be addressed at a general meeting of members of the Exchange. Typically, the Exchange Board are:
hearing and assessment report of the Board;
changes to the rules of the trade at the stock exchange;
preparation of decisions of the general meeting of members of the Exchange;
Dimensioning of all contributions, payments, money and fees;
preparation of decisions on the admission or exclusion of members of the Exchange;
management of stock trades;
disposition of the Exchange;
hiring and firing of staff exchanges, etc. from the Board is the Board which shall provide operational guidance and Exchange presents its interests in the organizations and agencies.
The actions of the Council and Board Bylaws and may have differences on different exchanges.Control over financial and economic activity of the Exchange's Audit Committee, which is elected by the general meeting of members of the Exchange at the Exchange Council.
The Audit Commission has the right to evaluate the validity of decisions adopted by the management of the Exchange. To the general meeting of members of the Exchange auditing Commission carries out documentary checks of financial and economic activity of the Exchange (continuous or spot), trading, clearing, foreign exchange and other transactions. In addition, the Audit Commission checks:
financial-economic activity of the Exchange, the State of its accounts and the reliability of the accounting documents;
production and operational, accounting and statistical accounting and reporting;
fulfil estimates, regulations and limits;
timeliness and correctness of payments to the budget;
timeliness and correctness of fees and payments;
compliance with stock exchange and its bodies of legislation and regulations, as well as the decisions of general meetings of members of the Exchange;
State banks and funds Exchange.
The Audit Commission conducts checks on:
instructions from the general meeting of members of the Exchange:
own initiative;
request of the Committee and participants of the Exchange-in total more than 10 per cent of the votes.
Audits are conducted at least once a year. The members of the Audit Committee shall have the right to require officials Exchange submission of all necessary documents and personal explanations.The test results are sent to the general meeting of members of the Exchange. In the absence of Auditors the Audit Commission is an opinion on the annual reports and balance sheets, on the basis of which the general meeting of Exchange members can approve it. The members of the Audit Committee are required to request the convening of an extraordinary meeting of members of the Exchange, if seriously threatened the interests of the Exchange.
Fixed structure of the Exchange is necessary for business exchange activity. How are the units that make up the fixed structure depends largely on the performance of Exchange.
Stationary structure is divided into Executive (functional) unit and specialized.
Executive (functional) unit is a unit of Exchange, which prepares and conducts stock market. They are very diverse and depend on the amount of stock exchange transactions, number of members and brokers, who work at the Exchange. However, mandatory units such as the listing Division, information Division, Registrar, Office software, bidding.
Specialized units are divided into commercial entities, such as the clearing house, the depositary and the Commission, the most important of which are: arbitration, quotation, admission to membership of the Exchange, according to the rules of Exchange trade and Exchange.
