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Agenda

Introduction Types of broker Nature of Work Regulation for brokers Eligibility Criteria for Membership Admission Procedure for New Membership Role & function of brokers responsibility of broker Worker ethics for broker Process of order execution Ways through broker earn money Major brokerage firms in India

Introduction

A stock broker is an intermediary who arranges to buy and sell securities on the behalf of clients (the buyer and the seller).

According to SEBI (Stock Brokers and Sub- Brokers) Regulations, 1992, a stockbroker is member of a stock exchange and requires to hold

a certificate of registration from SEBI in order to

buy, sell or deal in securities.

Types of brokers

Broker Full Service Broker Discount Brokers Discretionary Advisory Management
Broker
Full Service
Broker
Discount Brokers
Discretionary
Advisory
Management

Full Service Broker

Advisory

Expensive

 Full Service Broker • Advisory ▫ Expensive ▫ Have to maintain good relationship and contact

Have to maintain good relationship and contact

Provide financial consultant and financial advisory services

Range of products to buy E.g. bonds, MF (Mutual funds), ETF (Exchange Traded Funds), CD (Cash Deposits), etc.

• Discretionary Management ▫ Expensive ▫ Have to maintain good relationship ▫ Take complete control over
• Discretionary Management
▫ Expensive
▫ Have to maintain good relationship
▫ Take complete control over the investment
▫ Takes investment decision on behalf of customers
and provide only periodical statement to the
customers
Discount Brokers ▫ Low cost ▫ Only buying and selling of securities ▫ No range of
Discount Brokers
▫ Low cost
▫ Only buying and selling of securities
▫ No range of services
▫ No assistance

Nature of work

Securities sales representatives

Securities traders

Securities brokers

Securities analysts

Broker firms

Regulation for brokers

SEBI checks out that the applicant….

1. Is eligible to be admitted as a member of a stock exchange

2.Has the necessary infrastructure like adequate office space, equipment and manpower to effectively discharge his activities

3.Has past experience in the business of buying, selling or securities

4.Could pay the amount of fees for registration in the prescribed manner

  • The persons eligible to become broker are:

    • 1. Individuals;

    • 2. Partnership firms registered under the Indian Partnership Act, 1932;

    • 3. Institutions, including subsidiaries of banks engaged in financial Services;

    • 4. Body corporate including companies as defined in the Companies Act,1956.

Admission procedure for new membership

Roles & functions of broker

• Main roles broker perform ▫ Buying and selling of shares and other securities ▫ Providing
• Main roles broker perform
▫ Buying and selling of shares and other securities
▫ Providing advisory services
▫ Provide margin
▫ Brokering other securities
• Broker-Clients function • Client Registration Documents  Co-Contract documents  Know Your Client (KYC) document
• Broker-Clients function
• Client Registration Documents
Co-Contract documents
Know Your Client (KYC) document
Member Constituent Agreement (MCA) document
• Contract note
• Unique Client Code (UCC) allotment
• Segregation of Bank Accounts
• Segregation of DEMAT (Beneficiary) Accounts

Responsibility of broker

Security

Transaction Cost

Deposit and Withdrawal

Trading Platform

Customer Service

News about market

Worker ethics for broker

Duty of Fair Dealing

Duty of Best Execution

Customer Confirmation

Restrictions on Insider Trading

Duty of Loyalty

Authorization for Trading

Process of order execution

Process of order execution Broker Investor Stock exchange Pull account of broker DMAT of investor

Broker

Process of order execution Broker Investor Stock exchange Pull account of broker DMAT of investor
Process of order execution Broker Investor Stock exchange Pull account of broker DMAT of investor
Investor
Investor
Process of order execution Broker Investor Stock exchange Pull account of broker DMAT of investor
Process of order execution Broker Investor Stock exchange Pull account of broker DMAT of investor

Stock exchange

Process of order execution Broker Investor Stock exchange Pull account of broker DMAT of investor

Pull account of broker

Process of order execution Broker Investor Stock exchange Pull account of broker DMAT of investor

DMAT of

investor

Ways through broker earns money

Brokerage commissions

Margin interest charges

Service charges

Major brokerage firms in India

Broker

Brokerage for Delivery

Brokerage for Intraday trading

SBICAP Securities

0.50%

0.10%

Sharekhan

0.03% - 0.50%

0.03% - 0.10%

Motilal Oswal

0.30% - 0.50%

0.03% - 0.15%

5 paisa

0.25% - 0.85%

0.07%

Angel Broking

0.50%

0.02% - 0.03%

ICICI direct

0.75%

0.15%

Indiabulls

0.25% - 0.50%

0.05% - 0.10%

HDFC Securities

0.50%

0.15%

UTI Securities

0.80%

0.15%

Religare

0.20% - 0.30%

0.02% - 0.03%

Reliance Money

0.01%

0.01%

Geogit

0.30%

0.03%

Indiainfoline

0.50%

0.10%

Thank you