Whether you have gained a fortune or have yet to make money out of trading, it is essential for you to know the role of the market participants in the stock exchange. With that, it is important to first know what the stock market is.
What Is the Stock Exchange Market?
The stock exchange market serves as the environment where people can either purchase or sell their stocks.
The Philippine Stock Exchange, Inc. (PSE) is the national stock exchange in the country. The PSE facilitates the equitable buying and selling of stocks within the country by using a set of rules and regulations designed to make the stock marketplace’s system orderly.
The PSE regulates a number of market participants in order to maintain efficient and fair markets. Here are the main market participants in the stock market:
1. Investors
The investors are more commonly known as stockholders or shareholders.
They own or purchase their share of stock in a publicly listed company. They are equipped with different rights, such as voting rights, equal treatment, and many more.
2. Stockbrokers
Stockbrokers are individuals who are licensed by the Securities and Exchange Commission (SEC) to trade at the stock exchange.
They usually act as agents between the buyer and the seller of the share. In return for their services, they get a commission from their client.
3. Listed Companies
The listed companies refer to the issuers whose shares are available on the stock exchange for the purchase. Before a business is counted in the list of issuers, they have to pass a qualifying test established by the PSE and undergo an initial public offering.
4. Clearinghouse
The PSE’s clearinghouse is the Securities Clearing Corporation of the Philippines (SCCP), which is a wholly owned subsidiary.
The SCCP is the one responsible for setting the cash and security entitlements and liabilities of the clearing members.
5. Depository
The Philippine Depository and Trust Corp. (PDTC) serves as the securities depository or “custodian” of all the listed stocks traded at the PSE.
6. Settlement Banks
A settlement bank is where stockholders can send and receive the monetary shares of their stocks.
7. Transfer Agents
The transfer agent is the official keeper of the shareholder records. He or she is in charge of providing issuers with a list of their securities shareholders.
In stock investing, it is essential to know how to predict a price behavior. That said, it is vital to learn about the market participants who influence stock fluctuations.
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