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Lesson 2, Topic 3
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Organizational Set-up and Transactions at the stock exchange

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Only licensed members are admitted to carrying out business transactions there. It is a well and highly organized market. The Director-General is the head of its administration.

a. Stock Brokers: These are dealers in stocks and shares. They are professionals licensed by the security and exchange commission to buy and sell securities on behalf of the investing public (clients). They receive a commission known as a brokerage for their services rendered. Stockbrokers give professional advice to buyers on the most profitable stocks and shares.

b. Stock Jobbers: These are the wholesale dealers in securities at the stock market. They buy and sell goods on their own behalf. A broker who gets orders from a client approaches the jobbers who deal on such shares and haggle out the price until he gets a satisfactory price. Jobbers do not receive a commission but sells for a profit. Their profit which is the difference between the buying and selling price is called the jobbers’ turn.

c. Authorized Clerk: The salaried employees of the brokers and jobbers who help their principal to buy and sell stocks and shares are called authorized clerks. It is because they have the authority to buy and sell stocks and shares on behalf of their principals.

d. Unauthorized Clerks:  These clerks are also employees of the brokers and jobbers. They carry out office jobs and other duties but not authorized to buy and sell stocks and shares on behalf of their principal. The authorized clerks are not given access to the floor of the stock exchange.

e. Issuing houses: They are institutions that play pivotal roles in the packaging of issues for companies that needed additional capital from the market. Issuing houses are the ordinary members of the stock exchange market.

f. Registrars: These are the key operators in the stock exchange market. They see to the successful completion of shares acquisition and the process of registration. They are companies responsible for the administration of the company’s shares and keeping of the register of members.


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