What is the primary function of equity exchanges?

The primary function of equity exchanges is to provide venues for trading equity instruments such as common and preferred stocks. Equity exchanges serve as regulated platforms where buyers and sellers can transact ownership stakes in publicly traded companies. This facilitates liquidity, price discovery, and the ability for investors to enter and exit positions in stocks.

Equity exchanges play a crucial role in financial markets by ensuring that transactions are conducted efficiently and transparently. They operate under specific regulations to maintain fairness and to protect investors, which enhances overall market confidence. This function is distinct and focused compared to other options, such as trading commodities, offering financial advisory services, or issuing securities identification numbers, which do not encompass the core purpose of equity exchanges.