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Because exchanged markets like NASDAQ or NYSE are normal public businesses can they go into bankruptcy ? Supposedly they went into mysterious bankruptcy then what will happen to the listed companies and to the shareholder's stock who invested in companies that were listed in these markets ? Let's suppose I am an investor and I bought stocks from a listed company in NYSE and NYSE went into bankruptcy, even though NYSE is a unique business, meaning it doesn't have to do anything with that firm which I invested in. How would I know the stock price of that firm and will I lose my purchased stocks ? In general, what will happen after that ?

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Are you asking only about US markets? The American equity market is horribly fragmented across dozens of exchanges, but that fragmentation does have one good feature -- an exchange can break and the market goes on. Most other countries have just one exchange, in which case a broken exchange would be a lot worse. –  dg99 Aug 22 at 20:22

3 Answers 3

You seem to think that stock exchanges are much more than they actually are. But it's right there in the name: stock exchange. It's a place where people exchange (i.e. trade) stocks, no more and no less. All it does is enable the trading (and thereby price finding).

Supposedly they went into mysterious bankruptcy then what will happen to the listed companies

Absolutely nothing. They may have to use a different exchange if they're planning an IPO or stock buyback, that's all.

and to the shareholder's stock who invested in companies that were listed in these markets ?

Absolutley nothing. It still belongs to them. Trades that were in progress at the moment the exchange went down might be problematic, but usually the shutdown would happen in a manner that takes care of it, and ultimately the trade either went through or it didn't (and you still have the money). It might take some time to establish this.

Let's suppose I am an investor and I bought stocks from a listed company in NYSE and NYSE went into bankruptcy, even though NYSE is a unique business, meaning it doesn't have to do anything with that firm which I invested in. How would I know the stock price of that firm

Look at a different stock exchange. There are dozens even within the USA, hundreds internationally.

and will I lose my purchased stocks ?

Of course not, they will still be listed as yours at your broker.

In general, what will happen after that ?

People will use different stock exchanges, and some of them migth get overloaded from the additional volume. Expect some inconveniences but no huge problems.

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The consequences would be a little bit worse if it were NASDAQ or NYSE that went out of business, as those are the two listing exchanges of record in the US. There would be a fair bit of chaos behind the scenes to "promote" some other exchange to be a listing exchange and move all listings from the broken exchange to the new one. Also the data vendors and standardizers (Bloomberg, ANNA, etc.) would have quite a lot of late nights. But investors should be okay. (P.S. Exchanges do go out of business/get bought out regularly; most people simply don't hear about it.) –  dg99 Aug 22 at 20:18
    
I don't disagree with anything in this answer, though perhaps it is worth adding that if the NYSE went out of business, this would likely cause a lot of disruption and would surely AFFECT prices of stock of various companies. Just like if Exxon went out of business, individuals and companies who buy gas from Exxon might face all sorts of inconvenience and disruption. But as to your main point, absolutely. –  Jay Aug 22 at 20:44
    
Basically there's a temporary disruption in price and in availability/demand, for any stock whose main source of liquidity is via the exchange that goes down. But presumably the market-makers would want to act to find a new venue for that liquidity ASAP, given that they profit from supplying it. I wonder, would the people who most suffer be the ones with high-frequency trading systems located inside a particular location that suddenly isn't such prime real estate? Or would they act fast to ensure the new major exchange is in the same physical location? –  Steve Jessop Aug 23 at 12:33

@MichaelBorgwardt gave an excellent answer. Let me add a little analogy here that might help. Suppose you bought a car from Joe's Auto Sales. You pay your money, do all the paperwork, and drive your car home. The next day Joe's goes bankrupt. What affect does that have on your ownership rights to your car? The answer is, Absolutely none. Same thing with stocks and a stock exchange. A stock exchange is basically just a store where you can buy stock. Once you buy it, it's yours.

That said, there could potentially be a problem with record keeping. If you bought a car from Joe's Auto Sales, and Joe went out of business before sending the registration paperwork to the state, you might find that the state has no record that you legally own the car and you could have difficulty proving it. Likewise if a stock exchange went out of business without getting all their records properly updated, their might be an issue. Actually I think the bigger concern here for most folks would be their broker and not the stock exchange, as your broker is the one who keeps the records of what stocks you own long term.

In practice, though, most companies are responsible enough to clean up their paperwork properly when they go out of business, and if they don't, a successor company or government regulators or someone will try to clean it all up.

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It might be easiest to think of stock exchanges like brokers. If you buy a home, and your broker goes bankrupt, you still own your home, but you could not sell it without the aid of another broker.

Same with stocks, you own the stocks you buy, but you would be unable to either purchase new stocks or sell your stock holdings without an exchange.

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