Functions of Stock Exchanges are as follows:
(i) Providing liquidity and marketability to securities: The basic function of stock exchange is to provide a ready market for sale and purchase of securities. This provides liquidity and marketability to existing securities.
(ii) Pricing of securities: Share prices on a stock exchange are determined by the forces of demand and supply. Stock exchange makes continuous valuation of securities and quotes prices for securities.
(iii) Contributes to economic growth: A stock exchange is a market in which securities are traded. Through this process of disinvestment and reinvestment, savings get channelised into their most productive investment avenues. This leads to capital formation and economic growth.