What do you mean by Stockbroker? (Duties & types of stockbrokers, SEBI, Full-service Stockbrokers, Discount brokers, Stockbroker Regulations, Sub-broker)

 

A stockbroker is a professional who purchase and sell securities and stocks in a stock exchange on the behalf of investor. Exchanges acts a crucial role in the trading of securities at the same time an investor can`t straightly trade in stock exchanges. Therefore, an investor needs to access the services of intermediary for selling or selling of stock through exchanges. The stock broker may be a company or a person who is responsible to make sell or buy securities and stocks on your behalf. They may be an independent individual or usually related with a stockbroking company. The stockbroker may charge a certain percentage as fee or commission for giving the service. 

                    The stockbroker performs the services like bur or sell of securities or stock for the investors. They play an important part in providing data which assist the clients to make accurate investment decisions. The services provided by stockbrokers are pointed out below:

• The stockbrokers provide exact advice for the investors about the selling and buying of securities and stock. They are very familiar with the stock markets so that their services would effective guidance investors to take accurate decisions. The recommendations given by them are based on the thorough market research.
• They handle the paperwork related selling and buying of shares on behalf of their investors. They maintain records of all transactions and also perform the role of record keeper.
• They provide assistance for the investors to make variations in their investment techniques according to the circumstances prevailing in market.
• They pass information to the investors about the novel investment opportunity available in stock market.
• They give consistent updates to investors about their portfolios and also manages investor`s investment portfolio. Moreover, they provide solutions to the client`s investment queries.

The stockbrokers in India are functioning under the Stockbrokers and Sub-brokers Regulations 1992, Securities Contract Regulations Act 1956 and Securities and Exchange Board of India Act 1992. They are also controlled by other bylaws, regulations and rules that SEBI may issue from time to time. It is essential for every stockbroker to register with SEBI and needed to be a member of stock exchanges. They should showcase their registration details on official documents and their websites. People can check the registration details of stockbrokers on the SEBI website.

Type of Stockbrokers

                        I hope everyone understood the definition of stockbrokers and how they are regulated from the above section. On the basis of services given, stockbrokers can be classified into discount stockbroker and full-service stockbroker.

Full-service Stockbrokers

                        These types of brokers provide a full stack of services for their customers. They are like convention stockbrokers who gives facilities clubbed with advisory services. Therefore, the services charges of them are extremely high and broking fees charged by them are estimated on the total amount of traded performed by investors. They are well-known players and also have branches all over the country. The investors can access service and advice by visiting these branches.

Discount Brokers

                        The growing availability and use of internet leads to the raise of discount stockbrokers. The clients will get an online trading platform by these brokers. However, research facilities and advisory services are not provided by the discount brokers. Therefore, these stockbrokers also charge a low commission generally a flat fee. Nowadays, most discount brokers are providing online platform on which clients can sign in with username & password and perform trades. The online services provided by them are faster and trade can be executed with assistance of internet. The clients will get real time updates and can contact them through emails and chatrooms. The stockbrokers appoint sub-brokers to act on their behalf and they aren`t a member of stock exchanges. It is necessary for sub-broker to register with SEBI otherwise they don`t have right to deal with securities.