Stock Brokers in India: Stock brokers play an important role in the stock market. They are the mediators between the buyers and sellers of securities. They are required to register themselves with SEBI (Securities and Exchange Board of India) under Securities and Exchange Board of India Act, 1992 to buy or sell securities on behalf of investors.
Stock brokers’ in India can be classified into two types based on the services offered by them:
- Full-service broker: Full-service brokers offer a complete suite of investment options to their clients. A full-service broker is someone who is dedicated to providing comprehensive advice to his clients on his/her financial needs. Likewise, They have an expert team of financial advisors who offer you complete guidance on your investments. Services provided by a full-service broker.
- Portfolio management services: A portfolio manager helps you design, monitor and re-balance your investment portfolio according to your requirements. They suggest which stocks should be bought or sold in order to increase your returns. They charge fees for this service depending upon the total assets under management (AUM).
- Financial planning: Financial planning helps you set financial goals for yourself. It involves a detailed study of your current financial status and helps you decide which financial tools will help you achieve.
How to be a Stockbroker in India
A person who is interested in becoming a stockbroker can become a stock broker by passing the NISM-Series-VIII: Equity Derivatives Certification Examination and clearing the membership examination conducted by NSE or BSE. The license to act as stock broker is issued by SEBI. A person can become a sub-broker when they take a franchise from a broking firm or register themself under an existing member.
- Step 1: Get a bachelor’s degree. You generally need at least a four-year bachelor’s degree to work as a stockbroker. You can choose to major in any subject you wish, but courses in finance or economics may be helpful.
- Step 2: Find a broker-dealer firm that is willing to train you. While it may seem like you can skip the on-the-job training and become a broker immediately, this is not possible. You must find a brokerage firm that will sponsor you and allow you to sit for the Series 7 exam.
- Step 3: Pass the Series 7 exam. The Series 7 exam is the general securities representative qualification examination (GS) developed. It tests your knowledge of common stock, municipal fund securities, corporate bonds, options and direct participation programs.
- Step 4: If necessary, pass additional state exams in states that require them. These exams cover topics such as mutual funds and variable contracts, state laws and regulations governing investment advisers and more.
- Step 5: Obtain your stock broker licenses
- You have to open a demat account with depositories such as CDSL (Central Depository Services Limited) and NSDL (National Securities Depository Limited).
- You need to submit required documents such as photographs, address proof and identity proof along with the application form of SEBI. The application form has to be submitted at SEBI’s regional office.
- Your application will be processed within 6 weeks while getting a SEBI certification takes around 6 months.
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