Broker Presented by- Vishal Narvekar
• 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
Agenda
•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.
Introduction
Broker
Full Service Broker
AdvisoryDiscretionar
y Management
Discount Brokers
Types of brokers
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, ETF, CD, 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
•Securities sales representatives
•Securities traders
•Securities brokers
•Securities analysts
•Broker firms
Nature of work
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
Regulation for brokers
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.
Corporate & subsidiaries of banks (Rs in lakh)Particulars Capital
marketCapital Market & Future And Option
Whole Sale Debt Market
CM andWDM
CM,WDM &F&O
Minimum Paid-up capital
30 30 30 30 30
Net Worth 100 100 200 200 200Deposit with NSEIL
85 110 150 235 260
Deposit with NSCCL
15 15 * NIL 15 15 *
Experience Two year's experience in securities marketEducation Two directors should be HSC. Dealers should also have passed SEBI approved
certification test.
Track Record The Directors should not be defaulters on any stock exchange. They must notbe debarred by SEBI for being associated with capital market asintermediaries
Eligibility criteria for brokers
Individuals & Partnership Firms(Rs in lakh)Particulars Capital
marketCapital market & future and option
Whole sale debt market
CM &WDM
CM,WDM &F&O
Net Worth 75 75 200 200 200
Deposit with NSEIL
26.5 51.5 150 176.5
201.5
Deposit with NSCCL
17.5 17.5* NIL 17.5 17.5 *
Experience Two year's experience in securities market
Track Record
The Partners/Proprietor should not be defaulters on any stock exchange. They must not be debarred by SEBI for being associated with capital market as Intermediaries.
Education The Partners/Proprietor should be HSC. Dealers should also have passed SEBI approved certification test.
Admission procedure for new membership
•Main roles broker perform
▫Buying and selling of shares and other securities
▫Providing advisory services
▫Provide margin
▫Brokering other securities
Roles & functions of broker
• 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
• Security
• Transaction Cost
• Deposit and Withdrawal
• Trading Platform
• Customer Service
• News about market
Responsibility of broker
• Duty of Fair Dealing
• Duty of Best Execution
• Customer Confirmation
• Restrictions on Insider Trading
• Duty of Loyalty
• Authorization for Trading
Worker ethics for broker
Process of order execution
Investor
Broker
Stock exchange
Pull account of broker
DMAT of investor
•Brokerage commissions
•Margin interest charges
•Service charges
Ways through broker earns money
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%
Major brokerage firms in India
Thank you