Stock Exchange in the United States

Traditional Stock Exchange Definition

A building or room in which stock brokers meet to transact their business of purchasing or selling stocks. An association of stock brokers -according to the definition of Stock Exchange based on The Cyclopedic Law Dictionary– for the purpose of transacting their business. In large cities, the stock business is transacted through the medium of the members of the board of brokers.

This is an association of stock brokers governed by rules and regulations made by themselves, to which all the members are obliged to subject themselves. Admission is procured by ballot, and a member defaulting in his obligations forfeits his seat. A regular register of all the transactions is kept by an officer of the association, and questions arising between the members are generally decided by an arbitration committee. The official record of sales is the best evidence of the price of any stock on any particular day. The stocks dealt in at the sessions of the board are those which are placed on the list by a regular vote of the association; and when it is proposed to add a stock to the list, a committee is appointed to examine into the matter, and the board is generally guided by the report of such committee.  There are more definitions of Stock Exchange available in the legal Dictionaries.

Legal Materials

In the U.S., public company stock trades on several stock exchanges (a/k/a “stock markets”), including the New York Stock Exchange (NYSE Euronext), the NASDAQ and the National Stock Exchange (NSX) and the Chicago Stock Exchange (CHX). There was another big player called the American Stock Exchange (AMEX), which merged into NYSE Euronext on January 16, 2009. The formerly independent Philadelphia and Boston stock exchanges are now part of NASDAQ. But there are also significant new exchanges. As of 2011, the BATS Exchange and Direct Edge each handled about 10% of the trading volume in the U.S.

Exchange web sites provide current quotes and information about using the exchange (e.g., nyse.com, nyxdata.com, nasdaq.com, nsx.com, chx.com, directedge.com,batstrading.com). For more information about each exchange, see the New York Stock Exchange Listed Company Manual and/or the relevant CCH “Guide” (e.g., the New York Stock Exchange Guide, the NASDAQ Manual, the New York Stock Exchange Guide).

Disciplinary Decisions: Disciplinary decisions for individual exchanges are generally available on the exchange’s Web site, on the FINRA Web site, and/or on Lexis andWestlaw. Westlaw offers a combined database of decisions from the NYSE Hearing Panel, the AMEX Disciplinary Panel and the NASD National Adjudicatory Council (formerly the National Business Conduct Committee).

Foreign Exchanges: Links to foreign stock exchange Web sites are posted by Stock Exchanges Worldwide and the Rutgers University Libraries. Note: Many foreign stock exchanges have offices in the New York City; you can generally get the number from the exchange web site, or call NYC directory assistance (411 in NYC, otherwise 212-555-1212).

CCH publishes Guides for the Canadian exchanges, the China exchange and probably others.

Over-the-Counter Stocks

“Over-the-Counter” stocks are company shares not listed on any exchange and, hence, traded only “over-the-counter.” In fact, in the U.S., the big OTC stocks are generally traded on the National Association of Securities Dealers Automated Quotations System (NASDAQ). Quotes for these shares are available in the NASDAQ Stock Quotes database.

For more information about Over-the-Counter Stocks, click here.

Stock Exchange Rules

U.S. stock exchange rules are usually posted free (e.g., NASDAQ, CSX, NSX, Direct Edge, BATS, and the NYSE Listed Company Manual).

Stock exchange rules can be found on the relevant exchange’s web site and in the CCH “Guide” (ex., the New York Stock Exchange Guide) or “Manual” (e.g., the NASDAQ Manual) for that exchange, which are available as looseleafs or on CCH’s subscription-based Intelliconnect. For more legal materials about Stock Exchange Rules, click here.

Stock Exchange in Foreign Legal Encyclopedias

For starting research in the law of a foreign country:

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See Also

• Federal Reserve System
• NASDAQ
• Stock Exchange Rules
• Stock Prices
• Stock Swaps
• CUSIP Numbers
• Listing Applications
• New York Stock Exchange
• Stock Exchange Rules
• Stock Splits