Stock exchange is a market for stock and shares which provides trading facility between stock brokers and traders. It creates a reliable source of investment funds for business. They also provide facilities for the issue and redemption of securities, payment of income and dividends. Stock exchange encourages people to channel their savings into investment in real resources.

Stock exchange has stringent rules for admittance of firms and offer protection to share buyers. There is usually no compulsion to issue stocks via the stock exchange or trading them on the exchange. Such trading is called off exchange.

There are certain conditions imposed by stock exchanges before a company can be listed on that exchange. These are some major stock exchanges in the world.

London Stock exchange: To be listed on the London stock exchange, a company must have a minimum market capitalization (£700,000), three years of audited financial statements and sufficient working capital for at least 12 months.

NASDAQ Stock Exchange: To be listed on the NASDAQ, a company must have issued at least 1.25 million shares of stock worth at least $70 million. It also must have earned more than $11 million over the last three years.

New York Stock Exchange: To be listed on the NYSE, a company must have issued at least a million shares of stock worth $10 million over the last three years.

Bombay Stock Exchanges: To be listed on the BSE, a company must have a minimum market capitalization of Rs 250 million and minimum public float equivalent to Rs 100 million.