Broadcast: November 7, 2003
This is Bob Doughty with the VOA Special English Economics Report.
The largest stock market in the world is the New York Stock Exchange. It is also the oldest financial market in the United States. Its history dates to seventeen-ninety-two.
Today, two-thousand-eight hundred companies trade their shares on the New York Stock Exchange. Together, the value of those stocks is almost fifteen-million-million dollars.
These companies are all publicly traded. That means any investor can buy their stock.
A foreign company can trade on the New York Stock Exchange by placing some of its shares in a bank. An American Depositary [correct] Receipt is given in place of the stock, and can be traded on the exchange. About four-hundred-seventy companies from fifty-one other nations are represented on the New York Stock Exchange.
Stock is a share in the ownership of a company. Debt is also traded on the exchange. Bonds are generally sold in amounts of one-thousand dollars or more. Companies and governments sell bonds as a way to borrow money. Buyers earn interest as they wait for the bonds to reach full value. Bonds can also be resold or divided.
The New York Stock Exchange is owned by its members. It has more than one-thousand-three-hundred members. They have the right to buy and sell securities on the trading floor, for other investors or for themselves. A membership is traditionally called a seat. These can also be bought and sold. Seats on the exchange have sometimes sold for more than two-million dollars.
In nineteen-seventy-one, the New York Stock Exchange became a non-profit corporation. This means it does not pay taxes.
A board of directors governs the exchange. The board has twenty-seven members. Twelve directors come from the securities industry. Twelve others are public directors. The board also includes the chairman of the exchange and two other top officers.
In September, Richard Grasso resigned as chairman. This happened after the exchange reported for the first time the total value of his pay agreement. It was one-hundred-eighty-eight million dollars. A lot of people said that was too much.
The temporary chairman of the New York Stock Exchange is John Reed. He says he plans to reform the board of directors. We discuss some of those plans next week.
This VOA Special English Economics Report was written by Mario Ritter. This is Bob Doughty.