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    Chapter - 4.2: Stock Broking

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    Nisarg Shah
    Stock broking in India has become a mature and well-regulated profession due to SEBI regulations. Stock brokers act as intermediaries between buyers and sellers on the stock exchange, arranging trades on behalf of clients. They must register with SEBI and abide by codes of conduct regarding duties to investors, other stock brokers, and market integrity. Sub-brokers assist stock brokers but must separately register for each one they work with. Overall, the regulatory system has improved practices and removed inefficient players from the market.

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    Chapter - 4.2: Stock Broking

    Uploaded by

    Nisarg Shah
    188 views10 pages
    Stock broking in India has become a mature and well-regulated profession due to SEBI regulations. Stock brokers act as intermediaries between buyers and sellers on the stock exchange, arranging trades on behalf of clients. They must register with SEBI and abide by codes of conduct regarding duties to investors, other stock brokers, and market integrity. Sub-brokers assist stock brokers but must separately register for each one they work with. Overall, the regulatory system has improved practices and removed inefficient players from the market.

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    Stock broking chapter

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    Stock Broking

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    Stock broking in India has become a mature and well-regulated profession due to SEBI regulations. Stock brokers act as intermediaries between buyers and sellers on the stock exchange, arranging trades on behalf of clients. They must register with SEBI and abide by codes of conduct regarding duties to investors, other stock brokers, and market integrity. Sub-brokers assist stock brokers but must separately register for each one they work with. Overall, the regulatory system has improved practices and removed inefficient players from the market.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    188 views10 pages

    Chapter - 4.2: Stock Broking

    Uploaded by

    Nisarg Shah
    Stock broking in India has become a mature and well-regulated profession due to SEBI regulations. Stock brokers act as intermediaries between buyers and sellers on the stock exchange, arranging trades on behalf of clients. They must register with SEBI and abide by codes of conduct regarding duties to investors, other stock brokers, and market integrity. Sub-brokers assist stock brokers but must separately register for each one they work with. Overall, the regulatory system has improved practices and removed inefficient players from the market.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 10

    CHAPTER – 4.

    2
    STOCK BROKING
    Introduction
     Stock broking in India is now a mature service
    sector with all the checks and balances put in
    place by the market regulator - SEBl.
     Earlier this service was confined to metros and
    to the elite who are in the trade.
     But now the service is available at all locations
    even in remote towns because of the use of
    technology and the increased interest in stock
    market activities.
    Cont…
     Investor complaints against the brokers were
    common.
     But now, the current regulatory system has removed
    all the inefficient elements in the trade by putting in
    place appropriate regulations and evolving a code of
    conduct for the market participants.
     Capital adequacy norms ensured that the weak
    players get exited from the business. Stock broking
    is now a well-regulated professional service in India.
    Given the present situation of increased market
    volatility, the stock brokers face challenging tasks in
    their business.
    Stock Broker
     Stock Broker is the interface between buyers and
    sellers of securities.
     He function as a member of stock exchange to carry
    out trade in securities. It is mandatory that both
    stock brokers and sub-brokers have to get
    themselves registered with SEBI.
     Broker is intermediaries who arranges buy and sell
    securities on behalf of clients.
    Sub-Broker
     Sub-Brokers is not a member of recognized stock
    exchange. He is an affiliate of stock broker. He act
    on behalf of stock broker and assist the clients in
    trading of securities.
     A sub-broker can do the business with more than
    one broker. However, he/she has to separately
    register with the SEBI for each broker.
    Code of conduct for stock brokers: -

    1. General: The stock brokers should maintain


    high standards of honesty, promptitude and
    fairness in the conduct of his business.
     They have to exercise skill, care and due
    diligence in the conduct of business.
     A stock broker should not indulge in any
    manipulative transactions and misrepresent
    the equilibrium of the market forces.
    Cont…
    2. Duties to investor: A stock broker has the duty to
    rake up the order of the customer and execute it.
     He has to deliver the payment for sale of
    securities or deliver the securities to the investor
    in case of buying of securities.
     The information about execution or non-
    execution should be given to the investor
    promptly.
     Stock brokers should maintain the confidentiality
    of the information pertaining to the investment
    transactions of the clients.
    Cont…
    3. Stock broker vis-a-vis other stock brokers: A
    stock broker carries out transaction on behalf of
    his clients. In the process, he has to deal with
    other stock brokers who are at the other end of
    the transaction.
     A stock broker should cooperate with other
    stock brokers in protecting the interests of
    investors with regard to their right to dividends,
    bonus shares, rights shares, etc.
    SEBI may grant a certificate of registration
    subject to the fulfillment of certain conditions
    which are as follows:

     He holds the membership of any stock exchange.


     He shall abide by the rules, regulations and bye-
    laws of the stock exchange or stock exchanges of
    which he is a member.
     In case of any change in the status and
    constitution, he shall obtain prior permission of
    SEBI to continue to buy, sell or deal in securities
    in any stock exchange.
     He shall pay the amount of fees for registration
    in the prescribed manner.
    Cont…
     He shall take adequate steps for redressal of
    grievances of the investors within one month of
    the date of the receipt of the complaint and
    keep SEBI informed about the number, nature
    and other particulars of the complaints.

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