The Stock Exchange Market  

The object of this section is the study of the transactions done in the stock exchange market. In first place the conditions for being admitted to quotation are exposed and the financial information that is needed by the companies that quote on the market is detailed. This information is very important for investors to select companies with good perspectives.

Conditions for the admission of quotation
The securities may be admitted for negotiation at the official market or at the secondary market for small and medium companies. For a transaction to be admitted the issuing company needs to have a minimum of nominal capital, a minimum number of shareholders and to have obtained in the past years a determined percentage of earnings over the paid capital. For example, the Spanish official market demands that the minimum social capital to be of 1.2 million of Euros and the minimum number of shareholders to be 100. From the former limits the equal participations or those superior to 25% are excluded. Another requisite is to have generated in the past years, a benefit higher than the 6% of their own capital.

What is pretended with these conditions is that securities admitted for quotation have liquidity and that the offer the maximum guarantee to possible investors. Also, once securities are admitted for quotation on the official market, they have to have a determined minimum frequency of transactions (that is measured by a percentage of the market working sessions from each semester), and by the minimum volume of negotiations (that are measured with a percentage of the volume of nominal negotiations from the group of securities of the same nature with simple quotations).

The relative volume of negotiations is the percentage between the nominal negotiation of all the securities of the same nature (shares or debentures) included for quotation and the sum of the admitted capitals. If these requisites are not performed during two consecutive semesters or during three alternate semesters in a period of six, the stock exchange market may suspend the quotation of the security. In this case, if the issuing company does not find a solution to its problems, their securities might be excluded from quotation. To accede the secondary market, the conditions are similar, but the minimum demanded (nominal capital, cost of the emission and number of shareholders or debenture holders) are much smaller in order to be more accessible for small and medium size companies.