PRESENTATION ON STOCK BROKINGPrepared by:Ekta khuntAvani khunt

STOCK BROKINGIt includes following:Stock BrokerSub BrokersTrading & clearing membersForeign brokers

Stock BrokerMEANING:Stock broker is member of a

recognized stock exchange who buys, sells or deals in securities.

REGISTRATIONA broker seeking registration with

the SEBI has to apply through the stock exchange of which he is member.

Application must be forwarded within 30 days

Condition of registration Payment of Fees

CODE OF CONDUCT Stock broker has to maintain

high integrity ,promptness and fairness with due skills, care and diligence in the conduct of all his business.

He should not indulge in manipulative, fraudulent or deceptive transactions or schemes or spread rumors.

GENERAL OBLIGATION AND RESPONSIBILITIESEvery stock broker is required to

keep and maintain books of account ,records and documents.

Procedure of inspection

Contravention of the SEBI Act Rules and regulationMonetary penaltyPenalties specified under SEBI

Intermediaries Regulation,2008 including suspension or cancellation of certificate of registration.

Prosecution U/S 24

SUB BROKERMEANING: Sub broker acts on behalf of

a stockbroker as an agent or otherwise for assisting investors in buying, selling or dealing in securities through such broker.

Sub broker want to do business with more than one broker

Sub broker would have to disclose the name of all sub broker /brokers with whom direct/indirect interest in the same firm.

REGISTRATION According to the SEBI regulation

currently in force a sub broker is required to submit along with the application:

A recommendation from a stock broker with whom he will affiliated.

Two references including one from a stockbroker.

GENERAL OBLIGATIONPayment of fees: annual fees

paid by sub broker is Rs. 10,000 for an initial period of five years.

After the expiry of five years, Rs.5000 is payable

Maintain books of accounts

CODE OF CONDUCT Stock broker has to maintain

high integrity ,promptness and fairness with due skills, care and diligence in the conduct of all his business.

A sub broker should not disclose or discuss with any other person.

He does not encourage sales or purchase of securities for brokerage and commission.

Trading and Clearing/Self-clearing membersmeaningRegistrationPayment of fees Code of conductobligation

Trading and Clearing/Self-clearing members Trading Member is a member of a derivative

exchange/derivative segment of stock exchange who settles the trade in the clearing corporation through a clearing member.

Clearing member is a member of a clearing corporation of the derivative exchange who may clear and settle transaction in securities.

Self-clearing member is a member of a clearing corporation/house who may clear settles transactions on its own account or on account of its clients only.

Con…..Registration:

◦ registration with the SEBI by trading member◦Forward to 30 days◦Whether the applicant is 1)eligible to be admitted as a trading member 2)Has necessary infrastructure like office

space, equipment and manpower to effective his activity

3)Is subjected to disciplinary proceedings under the rules/regulation

4)Has financial liability which is due and payable to SEBI

Payment of FeesClearing member – 50,000 every

year Trading member - .0001 % of

turnoverSelf-clearing – primary

liability,15% interest on unpaid amount or late payment

Code of conductSpecified in the

rules/laws/regulation of DE/DSSEA clearing member should

1)Know your client format2)Risk disclosure document

Trading and clearing member of currency derivative segmentRegistrationPayment of feesCode of conduct

Con…..Registration:

◦ registration with the SEBI by trading member◦Forward to 30 days◦Whether the applicant is 1)eligible to be admitted as a trading member 2)Has necessary infrastructure like office

space, equipment and manpower to effective his activity

3)Is subjected to disciplinary proceedings under the rules/regulation

4)Has financial liability which is due and payable to SEBI

Payment of FeesClearing member – 50,000 every

year Trading member - .0001 % of

turnoverSelf-clearing – primary

liability,15% interest on unpaid amount or late payment

Code of conductSpecified in the

rules/laws/regulation of DE/DSSEA clearing member should

1)Know your client format2)Risk disclosure document

THANK YOU