A stock broker is a professional or an organization that acts as an agent/middleman between the buyers and sellers in the stock market.
Stock broker facilitates the buying and selling of stocks, debentures, ETFs, etc from the stock exchange. In return for the service, the stockbrokers usually charge a fee (brokerage) from their clients. The fee may vary from one stockbroker to another based on the service provided.
Rules and regulations of stock brokers
To participate in the trading, the stock brokers must obtain a license from the stock exchange and should also be registered with SEBI (Securities and Exchange Board of India).
In India, the Stockbrokers are regulated by the SEBI Act 1992, Securities Contracts Act 1956, and also the Rules, Regulations, and Bye-laws of the stock exchange of which the stockbroker is a member as well as various directives of SEBI and stock exchange issued from time to time.
Why do we need a stock broker?
An investor (especially beginners) will have several questions popping up in their mind like ‘Where should I invest?’, ‘Which investment will give me the best return?’, ‘Which stock should I buy or sell?’ and so on. Here comes the role of stockbrokers.
The stockbroker can be seen as an expert who is well versed in the stock market. So, they can provide timely assistance and the right information to the investors in making the correct investment decisions.
Apart from stocks, many stockbrokers also deal in other securities such as bonds, exchange-traded funds, mutual funds, derivatives (F&O), and commodity trading.
Things we must remember before selecting a stock broker
The stockbrokers will have a website where their SEBI registration and other details will be displayed. So, before fixing an agreement with a stockbroker, we must confirm that they are registered with SEBI.
Also, we should select a reputed stockbroker for trading and investing because choosing the right stockbroker leads you halfway to successful investing.
Stock brokers in India:
There are many numbers of broking firms all over India. Many of them have an international presence too. Following are the list of leading stock brokers in India
Zerodha
ICICI Direct
Angel Broking
Share Khan
Geojit Securities etc.
1 comment
What is your opinion about Motilal Oswal Financial Services? Are they a reputed firm in stock market? As a beginner in stock market , i like to know whether starting to trade with them is successful .