A stockbroker can be an individual or an organization that is specialized in the market services. They are given license to represent their clients in the securities market. A stockbroker works just like an agent for the sellers and buyers of securities. They charge a commission for the services that they provide. Before going for an account opening with any of the stockbroker, you must check a few things to ensure that you are dealing with an authorized broker by the company or SEBI as per the rules and regulations of the market. The broker can be a part of a broking company also, or he can be a franchise holder for a renowned company active in the share market. He must have valid licenses and other documents that can prove that he is authorized for trading in the market.
They merely perform services on behalf of their investors, i.e., they buy for the ones who want to buy and sell for those who wish to sell their securities making sure the client gets the best price.
A stockbroker is a boon for the investors as they help in making the best investment decision. They are obliged to answer all the questions that the investors ask and assist them by participating in the regional market.
Rules and Regulations for brokers
Stockbrokers have to follow the rules and regulations set by the government by the SEBI Act (1992) and Securities Contracts (1956). They have set certain directives for the stock exchange. The Best Stock Broker in India needs to be registered with SEBI to carry out their services. A registration certificate is issued by the SEBI that has a registration number and other important details that are necessary.
How to know if the broker is registered?
A registration number is provided by the SEBI after the proper registration process. To know whether the broker is registered, you can verify the registration number from the SEBI website. A sub broker’s registration number starts with “INB” whereas the registration number of broker starts with”INB.”
Documents to be signed
Before you start trading through a stockbroker, there are certain details you that you are supposed to provide such as name, address, and address proof. It is important to go through all the terms and conditions of the document carefully.
Sub-broker is a person who works for the profit of the investor and assists member-broker or investor directly in buying and selling services. Like the brokers, the sub-brokers also need to register by SEBI. They are not allowed continue the services and deal with any kind of security if they fail to register by SEBI. Strict regulations have been issued by SEBI that no person will be permitted to work as a sub-broker unless he/she has been registered by the SEBI. It is a must for the member-broker to sign an agreement with the sub-broker wherein all the rules and regulations of member-broker will be mentioned. Investors are also required to check the broker’s conditions before entering into some deal.