Concept and Characteristics of Trading Listed Stocks on the Centralized Stock Market

Listed stock concept

Among the types of shares issued by joint stock companies and traded on the stock market, there is a type of shares called "listed shares". In essence, listed shares are shares issued by a joint stock company that is a public company and this company has registered to list those shares on the centralized market for trading in accordance with the provisions of law.

At a general level, the concept of listed stocks can be given as follows:

Listed stocks are stocks issued by public companies, listed by public companies for trading on a centralized stock market in accordance with the provisions of securities law.

In theory, listed stocks have the following basic characteristics:

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Firstly, listed stocks are stocks issued by joint stock companies that issue listed stocks – called public companies. In order to be able to circulate listed stocks on the centralized stock market, the company must carry out procedures for listing stocks on exchanges, where listed stock trading activities take place. And only when businesses fully carry out procedures for listing stocks, can listed stocks circulate on their own market under the name of listed stocks.

Second, listed stocks are traded on a centralized stock market, have good quality and therefore have high liquidity. Listed stocks are often issued by reputable companies with good business performance and continuous for a long time, so when participating in the market, they are easily bought and sold, or in other words, easily traded on the market. Therefore, investors believe in the profitability and ability to recover capital of listed stocks. Therefore, the liquidity

The value of these stocks is considered higher than that of unlisted stocks.

Third, listed stocks must meet very strict standards as prescribed by law to protect the interests of investors. Therefore, these stocks are always considered a potential commodity circulating in a good growth market - that is, a concentrated stock market. Although not all stocks of enterprises can bring efficiency to investors' investments after a period of listing on the stock market, most companies that list their stocks are usually companies that have consolidated their internal strength as well as have a good value foundation in terms of both economic value and corporate reputation. Therefore, in terms of long-term vision, enterprises always aim for large profits, which means that the value of stocks will also increase compared to the price at the time of listing.

1.1.2. Concept and characteristics of listed stock transactions on the concentrated stock market

From a legal perspective, listed stock transactions are essentially a type of civil transaction, in which the main transaction object is stocks listed on the stock exchange [2].

Listed stock transactions are established between entities including the seller - the party holding the listed stocks and the buyer - the party with money and the need to buy listed stocks in order to seek profits from the investment. At the stock exchanges, the buying and selling of securities does not take place directly between those who want to buy and sell securities with each other but is often carried out by intermediaries at the request of the buyer and seller on the basis of a securities brokerage service contract.

Theoretically, the concept of listed stock trading can be given as follows:

Trading listed stocks on a centralized stock market is a contract for buying and selling listed stocks established between a seller and a buyer through an intermediary transaction method at a centralized, unified and organized trading market.

In theory, trading stocks listed on a centralized stock market has the following basic characteristics:

Firstly, listed stock transactions are established and executed on a special trading market – the centralized stock market.

Listed stock transactions are essentially civil transactions. However, unlike ordinary civil transactions that take place regularly and continuously at any location and time agreed upon by the parties, listed stock transactions must be conducted on the centralized stock market, which is the Stock Exchange and the Securities Trading Center, within a certain period of time, and must comply with the trading regulations of this market. This ensures that the management of listed stock transactions is carried out in a centralized manner, under the close supervision of competent authorities, minimizing potentially risky transactions, and ensuring the integrity of the rights and interests of the parties participating in the transaction [2].

Second, the entities participating in the trading of listed stocks on the concentrated stock market are separate entities that only exist in the trading of listed stocks.

For listed stock transactions, an important feature is that the subjects participating in these transactions are specifically identified with each name and separate function and role when conducting the buying and selling of listed stocks on the centralized stock market. In other words, to trade listed stocks, only these subjects have the right to conduct transactions on the centralized stock market. Subjects participating in transactions

Listed stocks include: Investors (playing the role of the seller), Investors (playing the role of the buyer) and securities trading organizations (playing the role of intermediaries in the stock market to buy or sell securities for investors).

Third, listed stock transactions are always conducted through intermediary trading methods.

Under this method, the seller and buyer of securities (listed stocks) do not meet directly to trade or negotiate directly with each other, but the buying and selling is carried out through trust contracts with securities trading organizations - with the role of intermediaries in the buying and selling of listed stocks on the stock market. Depending on the content of the purchase and sale orders given by the investor, the intermediary organization will execute these orders according to the requirements of the buyer and seller, if those requirements are consistent with the prices of the listed stocks that have been determined after matching orders according to the trading regulations of the stock market.

Fourth, listed stock transactions have special trading objects - those are stocks that have been listed on the stock market.

In theory, listed stocks have different characteristics compared to unlisted stocks, as analyzed in section 1.1.1 of this thesis. These characteristics are not only related to the mechanism of listing stocks on the stock market, but also related to the financial status and business results of the issuer - that is, public companies [27].

Fifth , trading of listed stocks on the centralized stock exchange is carried out with separate transaction processes and forms.

With the specific characteristics of the transaction object being listed stocks, it is a special type of asset different from normal assets that are freely circulated.

In civil society, listed stock transactions are of great value and have a strong influence on the economic market of the country, therefore, when carrying out these transactions, it is necessary to comply with the correct processes, procedures and forms prescribed by law. The processes, procedures and forms of transactions that the parties are required to carry out are the transaction principles determined in the governing legal regulations. Determining these separate processes and forms of transactions is to ensure the effectiveness of the transaction, promote the stable development of the transaction market as well as protect the safety of the national economy.

In summary, with the above characteristics, listed stock trading is not only a method to satisfy the needs of investors (buyers and sellers), but also brings a stable source of profit to securities trading organizations when performing securities services for customers on the stock market.

1.1.3. Principles, conditions and methods of trading listed stocks on the concentrated stock market

1.1.3.1. Principles of trading listed stocks on the concentrated stock market

Principles of intermediary transactions

In the centralized stock market, all securities transactions in general and listed stock transactions in particular are usually carried out through intermediary brokerage organizations, which are securities companies at the Stock Exchanges and Securities Trading Centers. In the primary market, investors usually do not directly trade with the stock issuer but place orders from underwriters. In the secondary market, through brokerage services, securities companies buy securities for investors, or buy securities from these investors to buy and sell to investors.

This principle is established to ensure that the securities traded are real securities and help the market operate healthily, protecting the interests of investors. Especially for securities that are listed stocks, the goals of the subjects participating in transactions related to this subject are often goals with large transaction values, ensuring that transactions are not limited by risks and obstacles in the transaction process is the purpose that this principle aims for [54].

Pricing principles

The value of securities on the stock market, especially the value of listed stocks, depends entirely on the fluctuations of the stock market. At any given time, depending on judgment and the supply and demand index of stocks on the market, the price of listed stocks can increase or decrease in accordance with the supply and demand laws of the market. The value of securities in each transaction is determined at the time the parties express their will to buy or sell stocks, then the price of these securities is determined based on the final agreement of the buyer and seller when establishing the transaction. For stock transactions by order entry method, the valuation value of the stock is determined at the time the parties enter the buy/sell order to the market. For stock transactions by negotiation method, the valuation value of the stock is determined as the price at the negotiation content between the seller and the buyer when the two parties have agreed. In particular, for this method of agreement, the price of the stock will not change even in the case that at the time of entering the buy/sell order, there is a difference with the price agreed by the parties. All relevant members in the market cannot interfere with the supply and demand relationship of securities in the market and no one has the right to arbitrarily set the price of securities. Therefore, the stock market is considered the freest market among the markets.

This principle ensures that listed stock transactions are public and transparent, ensuring the rights and interests of the parties involved in the transaction, as well as complying with market rules.

Publicity principle.

Not only listed stocks, all activities on the stock market are made public regarding all types of securities offered for trading on the market, as well as the financial situation of the issuing company's business results and the number of securities, and the prices of each type are made public on the market and in reports. When a transaction is completed, the number of securities bought and sold, and the prices of each type are immediately announced. This principle aims to ensure that buyers and sellers of securities face less risk in securities transactions, especially listed stock transactions on the centralized market. At the same time, this principle also ensures that buyers of securities can easily choose the type of listed stocks according to their preferences, have the ability to access many issuing units and aim to ensure profit seeking and limit risks participating in the stock market [26, p.32].

1.1.3.2. Conditions and methods of trading listed stocks on the concentrated stock market

In theory, the establishment and execution of transactions of listed stocks on the concentrated stock market must comply with the following conditions:

Firstly, the subject of the transaction must be a stock that has been listed on the stock exchange by the issuing unit. To participate in the concentrated stock market, the shares of joint stock companies participating in buying, selling and transferring transactions on this market must fully comply with the requirements and procedures for listing securities to determine that the shares traded are listed shares. This ensures that the shares

Listing has high practical value and ensures the rights and interests of the parties participating in the transaction, especially the interests of investors in the process of seeking profits based on the stable development of listed stocks.

Second, investors must open an account at the centralized stock market and ensure that the account has enough money to pay for listed stock transactions. The creation of customer payment accounts on the centralized stock market is to serve the activities of buying and selling listed stocks and at the same time is a basic condition to accurately determine the information of investors participating in transactions and the financial capacity of investors on the stock market. In addition, this is also the place to store information about listed stocks circulating on the market and transactions that investors perform, helping investors easily control financial information. In particular, to complete transactions, investors must ensure the realization of transactions by directly completing financial obligations as well as procedures to be able to proceed with the transfer of ownership of listed stocks in which they participate in transactions, therefore, it is required that the investor's account must have enough financial value to serve the transactions.

Third, listed stock transactions must be carried out through brokerage intermediaries, which are securities companies, and the companies must be accepted as members of the Stock Exchanges and Securities Trading Centers. Securities brokerage intermediaries will be the units that grasp information as well as directly influence the activities of listed stock transactions that the seller and the buyer wish to conduct. On behalf of the seller and the buyer, executing transaction orders at centralized securities trading points, this entity must have the authority and capacity to execute transaction orders at the trading points. Therefore, in order to control transactions and execute transaction orders consistently, brokerage units

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