broker and responsibilities

8/13/2019 Broker and Responsibilities

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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 holda certificate of registration from SEBI in order to buy, sell or deal in securities.

Introduction


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Broker

Full ServiceBroker

Advisory DiscretionaryManagement

Discount Brokers

Types of brokers


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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 (Mutualfunds), ETF (Exchange Traded Funds), CD (CashDeposits), etc.


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Discretionary Management

Expensive

Have to maintain good relationship

Take complete control over the investment

Takes investment decision on behalf of customersand provide only periodical statement to thecustomers


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Discount Brokers

Low cost

Only buying and selling of securities

No range of services

No assistance


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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 prescribedmanner

Regulation for brokers


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The persons eligible to become broker are:

1. Individuals;

2. Partnership firms registered under the Indian

Partnership Act, 1932;

3. Institutions, including subsidiaries of banksengaged in financial Services;

4. Body corporate including companies as definedin the Companies Act,1956.


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Admission procedure for new membership


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Main roles broker perform

Buying and selling of shares and other securities

Providing advisory services

Provide margin

Brokering other securities

Roles & functions of broker


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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


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Security

Transaction Cost

Deposit and Withdrawal

Trading Platform

Customer Service

News about market

Responsibility of broker


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Duty of Fair Dealing

Duty of Best Execution

Customer Confirmation

Restrictions on Insider Trading

Duty of Loyalty

Authorization for Trading

Worker ethics for broker


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Process of order execution

Investor

Broker

Stock exchange

Pull account of brokerDMAT ofinvestor


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Brokerage commissions

Margin interest charges

Service charges

Ways through broker earns money


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Broker Brokerage forDelivery

Brokerage for Intradaytrading

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%

Major brokerage firms in India


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Thank you