Page:Harvard Law Review Volume 8.djvu/452

436 securities, to which other stockbrokers may become members by election. Governors, officers, and committees with power to make rules regulating matters connected with the Exchange, the conduct of its members, and the transaction of business are elected by the members. The rules they make are supplemented by a variety of established customs, which have the same force and effect as the written rules.

A stockbroker who is a member of a Stock Exchange must act in accordance with its rules and customs if his dealings are to be allowed and receive its recognition. It follows that a person who wishes to employ a stockbroker in his capacity of member of a Stock Exchange must do so in such a way that the stockbroker's acts under employment can conform to the rules and customs of his Exchange. For this reason it seems best to state what are the main rules and customs of American Stock Exchanges relating to the conduct of business by their members before considering the relations of stockbrokers with their employers, who are commonly called "customers" or "clients."

1. Every Stock Exchange provides a meeting place, called "the floor" of the Exchange, where its members may transact business with one another.

2. Every Stock Exchange allows dealings on its floor only in certain kinds of securities which are selected by the governors or by a committee. Since these securities are placed, when selected, on some kind of a published list, they are known as "listed securities."

3. Every Stock Exchange allows only certain kinds of transactions in listed securities to be made on its floor, and the way these transactions must be performed is fixed in detail by the rules and customs of each Exchange. The most important of these