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 SubBrokers) 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

Advisory

Discretionary Management

Full Service Broker Advisory

Expensive

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 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 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 advisory services Provide margin Brokering other securities

 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

Stock exchange

Broker

Investor

DMAT of investor

Pull account of broker

Ways through broker earns money

Brokerage commissions Margin interest charges Service charges

Major brokerage firms in India

Broker Brokerage for Delivery 0.50% 0.03% - 0.50% 0.30% - 0.50% Brokerage for Intraday trading 0.10% 0.03% - 0.10% 0.03% - 0.15%

SBICAP Securities Sharekhan Motilal Oswal

5 paisa
Angel Broking ICICI direct Indiabulls HDFC Securities

0.25% - 0.85%
0.50% 0.75% 0.25% - 0.50% 0.50%

0.07%
0.02% - 0.03% 0.15% 0.05% - 0.10% 0.15%

UTI Securities Religare

Reliance Money Geogit Indiainfoline

0.80%
0.20% - 0.30% 0.01% 0.30% 0.50%

0.15%
0.02% - 0.03% 0.01% 0.03% 0.10%

Thank you