Exchange

An exchange generally occurs when one company acquires another. The shareholders of the acquired company are often given the option to sell their shares to the acquiring company or exchange their existing stock for stock of the acquiring company. When a filer exchanges his/her stock, they must specify both the stock tendered and the stock acquired in its place. For example, ABC Corporation recently acquired XYZ Corporation. ABC gave its shares to the shareholders of XYZ in exchange for their XYZ shares.

Traditionally, an exchange has been a physical location for trading securities. Trading is handled, at least in part, by an open outcry or dual auction system.

Two examples in the United States are the New York Stock Exchange (NYSE), which has the largest trading floor in the world, and the Chicago Board Options Exchange (CBOE).

However, the definition is evolving. Traditional exchanges handle an increasing number of trades electronically, off the floor. NASDAQ and other totally electronic securities markets, without trading floors, have exchange status.

As a result, the terms exhange and market are being used interchangeably to mean any environment in which listed products are traded.

The term exchange also refers to the act of moving assets from one fund to another in the same fund family or from one variable annuity subaccount to another offered through the same contract.

Exchanges refers to state and federal health insurance exchanges. Maryland’s state insurance marketplace is called Maryland Health Connection.

The ACA creates an Exchange in each state to assist individuals and small businesses in comparing and purchasing qualified health insurance plans. Exchanges will also determine who qualifies for subsidies and make subsidy payments to insurers on behalf of individuals receiving them. They will also accept applications for other health coverage programs such as Medicaid and CHIP.

A marketplace in which shares, options and futures on stocks, bonds, commodities and indexes are traded.

1. A room or building equipped so that telephone lines terminating there may be interconnected as required. Note: The equipment may include manual or automatic switching equipment. 2. In the telephone industry, a geographic area (such as a city and its environs) established by a regulated telephone company for the provision of local telephone services. 3. In the Modification of Final Judgment (MFJ) a local access and transport area (LATA). 4. A geographic area tariffed by a state utilities commission and served by an incumbent Local Exchange Carrier (LEC). A LEC's franchise territory is comprised of multiple Exchanges and the Basic Local Calling Areas are defined by Exchanges. The Exchanges are generally in the state General Subscriber Services Tariff, Section A3. The term "Exchange" denotes a geographic area generally smaller than a Local Access Transport Area (LATA) and usually embraces a city, town or village and its environs. Subscribers in a given Exchange area may be served by one or more central offices together with the associated facilities or subscribers in an Exchange area may be served by a central office located in an adjacent Exchange area. (A LATA is usually comprised of multiple Exchanges.)