Stock exchange is a market where buyers and sellers of securities come together. Due to this stock exchange play the role of an intermediary. It provides the facility of speculation to the speculators. Speculation is a way by which demand and supplies of the securities are adjusted. It provides the facility of capital formation to the listed companies, because it is a place where the people come and invest their surplus funds.
If the management of a company wants to trade the share of the company in the stock exchange, they will have to fulfil the requirements for the listing of company. Stock exchange has indirect impact on the management of the company. Stock exchange protects the investors by ensuring the fair dealing for the sale and purchase of securities. The members of the stock exchange are bound to act within the limits set by the stock exchange.