Stock broker – Defined in detail


It is said that an organization or any individual who in particular possess a license to play a part in the securities market in place of their customers is known as the stockbroker. The stockbroker plays the part of an agent. The stockbroker levies commission from the client as soon as the broker performs the role of an agent in selling and buying of securities. One can term them as an intermediary also who connect the exchange to the clients. From both viewpoints, the role of a stockbroker is very important. A stockbroker also connects the company to the client.

The stockbroker in the shape of an agent is just carrying out a service in favor of an investor. By it is meant that the stockbroker will sell stocks and purchase the stocks only for the investor every time and makes it definite that the customer obtains handsome cost. The investor is required to consider the stockbroker like an individual who proffers precious information and service to aid the investor in taking the right decision about an investment. The top 10 stockbrokers in India is suitably well qualified to offer replies to any sort of queries that the investor has in mind and help the investor in taking part in the market especially regional. 

Rules and regulations that govern them, if any

The answer is in affirmative. All the stockbrokers are presided over by SEBI Act of 1992, furthermore by Securities contracts act- regulation enacted in 1956. SEBI—securities and exchange board of India made for stockbrokers and sub-brokers 1992, bye-laws, rules regulation of stock exchange wherein he holds membership and also follows the directives that are given at times when needed. All stockbrokers are needed to obtain membership from a stock exchange and also seek registration from SEBI. It is necessary to scrutinize the registration number issued by the SEBI, and many more details are to be noted on the registration certificate that is issued by the SEBI.

 Method to know whether the broker is registered

Almost all brokers show off the details of their registration on their website and also exhibit on all other necessary documents. You can go to the website of the SEBI to check details of the registration. On the website of SEBI are exhibited all details of the brokers who are registered with it. The stockbrokers are provided with the letters INB in front of their registration number, and the letters INS are given to the sub-brokers.

Documents that are to be signed by an investor and stockbroker

Ahead of entering into any kind of trade with any stockbroker, it is necessary for you to give the important details for instance address, proof of address, and name, etc. and put in place agreement between the investor and the broker. You are permitted access to one more document called Risk Disclosure Document by which you are able to ascertain the potential risks found in the securities market. You should necessarily read all the documents to get information.

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