• Responsible for:

  • Buying and selling securities on behalf of clients

  • Ensuring clients get the best price

  • Charging a commission (brokerage) for their services

Stockbrokers play a crucial role in the securities market, facilitating transactions and providing valuable services to investors. Their expertise and market knowledge help clients make informed investment decisions.

Stockbroker's Role and Responsibilities

Stockbrokers:

• Provide valuable information and services to clients

• Assist clients in making informed investment decisions

• Answer investor questions and guide them in participating in the stock market

• Must be members of a stock exchange

• Must be registered with SEBI (Securities and Exchange Board of India)

• Hold a SEBI registration number and certificate

• Are bound by SEBI directives and stock exchange regulations

Stockbrokers play a crucial role in the investment process, and their expertise and guidance are essential for investors to navigate the complex stock market. Their registration and membership ensure they operate within a regulated framework, protecting investor interests.

Stockbroker Regulation and Governance

Stockbrokers in India are regulated and governed by:

1. The SEBI Act of 1992

2. Securities Contracts (Regulation) Act of 1956

3. SEBI (Stockbrokers and Sub-brokers) Rules and Regulations of 1992

4. Regulations, Rules, and Bye-laws of the stock exchange (of which they are a member)

Verification of Registration

• Brokers must display registration details on their website and official documents

• Registration details can be confirmed on the SEBI website

• Registration numbers:

  • Broker: starts with "INB"

  • Sub-broker: starts with "INS"

Leading Stock Broking Firms in India

• Sharekhan

• (Other prominent firms include Zerodha, Angel One, HDFC Securities, ICICI Direct, etc.)

These regulations and governance frameworks ensure that stockbrokers operate with transparency and accountability, protecting the interests of investors.

 Important Reminder for Investors

Before opening a trading account with a broker, investors should:

• Carefully review the broker's terms and conditions

• Check for variations in charges, such as:

  • Brokerage charges for delivery and intraday trades

  • Minimum transaction charges

  • Statement charges

  • DP charges

  • Annual maintenance charges

• Note that the government charges taxes, including:

  • Service tax

  • Security transaction tax

  • Stamp duty

  • Exchange transaction tax
    are uniform across all brokers

Investors should be aware of these charges and taxes to make informed decisions and avoid any surprises or unnecessary costs. It's essential to understand the brokerage firm's pricing structure and fees before opening a trading account.