Stock exchanges are a form of exchange that provides services for trading stocks, bonds and other securities. They also provide conditions for the placement and repurchase of equity securities and other financial instruments, even the payment of income and dividends.
Any exchange must be registered in the necessary order. Previously, they were located mainly in the centers of large cities, but today trade is becoming less and less connected with a physical place. This is due to the fact that numerous modern electronic network markets have appeared, having advantages in the form of high speed and reduced transaction costs. In order for the stock exchange to be available, you must become a member.
The securities market took centuries to develop to a modern state. The idea of borrowing money goes back to the ancient world, as evidenced by the Mesopotamian clay tablets with notes on interest loans. Today, scientists are divided on when corporate stock trading first began. Some believe that the founding of the Dutch East India Company in 1602 served as a key event, while others point to earlier events.
So, in the Roman Republic, which existed for centuries before the proclamation of the empire, there was a societates publicanorum - an organization of contractors or tenants who carried out the construction of temples and provided other services to the government. One of these services was feeding the geese on Capitol Hill (as a reward, because the birds emitted sounds to warn the Romans of the Gallic invasion in 390 BC). The participants in such organizations had actions, the essence of which was explained by the statesman and speaker Cicero. Such "stock exchanges" (more precisely, their ancient prototypes) disappeared during the reign of the emperor, since most of the assets passed to the state.
Bonds trading first arose in Italian cities in the late Middle Ages and during the early Renaissance. In 1171, the authorities of the Republic of Venice, worried about the depleted treasury, began to practice compulsory loans from citizens. Such payments, known as Prestiti, had an indefinite maturity and promised compensation in the amount of 5 percent of the amount per year. Initially, they seemed suspicious, but subsequently began to be regarded as valuable investments that can be bought and sold. The bond market has begun to grow.
As with the latter, stock exchanges developed gradually. Partnership agreements regarding the division of shares were often mentioned already in the 13th century, again mainly in Italy. However, such agreements usually applied only to a small group of people and were concluded for a limited period, for example, on one sea voyage.
These commercial innovations eventually moved from Italy to Northern Europe. By the end of the 16th century, English merchants were already collaborating with joint stock companies designed to work on a permanent basis. In the 18th century, stock exchanges practically did not differ from modern ones.
The main merit of these organizations is that they do not require huge capital expenditures to invest in stocks. This gives the same opportunity to invest both large and small investors - a person buys as many shares as he can afford. In addition, today there are many varieties of these enterprises - the currency and stock exchange, futures, etc.