INTRODUCTION
In this first chapter of this project work, it is pertinent to define the team, STOCK EXCHANGE before I proceed.
Stock Exchange could be defined as a market in which the activities of buying and selling of shares, stocks, bonds, debentures, and other securities are facilitated. Therefore, it is essentially a secondary market for buying and selling of already existing securities.
BACKGROUND OF THE STUDY
In Nigeria, the Stock Exchange market started as the Lagos Stock Exchange. It was registered on the 15th day of September 1960. The Nigerian Stock Exchange was established on the Lagos Stock Exchange Act of 1961.
Its establishment was a follow-up to the report of the committee appointed to advise them on the ways and means of fostering a share market in Nigeria. This committee was set up in 1958, under Professor R. H. Barback, by the Federal Government for considering the ways and means of promoting a Stock Exchange market in Nigeria at its inception. The Lagos Stock Exchange was heavily subsided by the Federal Government Institutions. It was transformed into the Nigerian Stock Exchange in 1977. The Nigeria Stock Exchange has branches in Kaduna, Port Harcourt, Ibadan and Onitsha.
RELATED LITERATURE REVIEW
The suggestion of the literature is that the practice, which has gradually metamorphosed into the Stock Exchange (as it is known today), took its root from the bourgeoning trade in Agriculture and other commodities developing in some of the major European centers during the middle ages. It was the practice in which traders gather at a particular place and time appointed, during the trade fairs, to strike bargains on commodities. This kind of trade was being conducted often to credit notes; some to be in use as evidence of the credit and as the instruments of effective settlement.
As time passed by, it became possible for those documents to be traded or discounted through a process of endorsement and negotiation. Apparently, the trade in these documents appeared to be the fore bearers to the trade in other forms of securities, such as the bonds issued by commercial firms. Evidently, there was thriving trade in credit instrument in Paris. During the 12th and 13th centuries, and of the development of the profession of curatives de change (modern course de change), meaning, brother in finance. During this period, development was taking place also in Bruges (now in Religions) during the same period.
This partner of development from trade in commodities was roughly the same for most of the early Stock Exchange markets to trade in securities, which sprang up in many European Centers.
For instance, in Amsterdam, which was already a major trading center in Europe by the middle 16th century, there also was a development of Stock Exchange where shares in the Dutch East Indian company among others were publicly sold during the 17th century. In Germany and Britain, during the periodic meetings of traders in coffee houses in India to strike bargains, there also came into being, a formal Stock Exchange which also developed with time in virtually the same way in other trading centers in copenhunges, Berlin, Zurich, Philadelphia, and also New York. New York traders had been meeting regularly at 68 Wall Street, to engage in commodity trade, before the formal association of merchants took place from about 1792 to form the nucleus of the New York Stock Exchange.
Besides the initial impetus provided by the prior existence of trade, two other important factors by the early development of the Stock Exchange will be disused. The first was the development at about the same period of allied financial institutions such as banks and insurance companies, which arose to meet the growing demands of the expanding volume of trade and commerce. These institutions needed capital with which to finance their own operations, and such finance could be obtained through the sale of securities assisted by the Stock Exchange.