Overview

An exchange is a location or a process which brings together buyers and sellers of a security. It is the physical manifestation of the what in economics is known as a market.

Players in Exchange Traded Securities

• Broker - brokers are firms that are authorized to connect to an exchange for the purpose of trading. Retail clients cannot connect directly to the exchange themselves, instead they hire a broker who will place trades for them.
• Exchange - the exchange is the platform (or location) where trading occurs
• Central Securities Depository (CSD) - a CSD is a company who warehouses securities and holds them for their clients. In this case, brokers have accounts with the CSD who holds their securities for them.