With a hosted wallet, a third party knows your private keys and doesn't reveal them to you, but the company will send, receive, and store bitcoins on your behalf (not unlike a traditional bank, which stores your cash in a vault and won't give you the keys to open it).
This is what i want to setup into my server,
So you means the exchange wallet?
Exchange wallets keep your private key on behalf oof you and they do the actions as you want like traditional banking system but we can't say exchange as an wallet,wallet means you are owning it and you have the full accessibility to it so private key is essential for an wallet.