Rules and regulations
Stock Broker
A stock broker is a person or entity, who is a member of a stock exchange.
A stock broker acts as a facilitator to carry out transactions of investors
on a stock exchange. Thus if you want to buy say 100 shares of a company
in the secondary securities market, he would have to go through a stock
broker registered in NSE to carry out his transactions on National Stock
exchange.
Whether stock brokers
are governed by any Rules and Regulations?
Stock brokers are governed by SEBI Act, Securities Contracts (Regulation)
Act, Securities and Exchange Board of India [SEBI (Stock brokers and Sub
brokers) Rules and Regulations, Rules, Regulations and Bye laws of stock
exchange of which he is a member as well as various directives of SEBI
and stock exchange issued from time to time.
Documents to be signed
with stock broker
Before start of trading with a stock broker, you are required to furnish
your details such as name, address, proof of address, etc. and execute
a broker client agreement. You are also entitled to a document called
Risk Disclosure Document, which would give you a fair idea about the risks
associated with securities market. Please go through all these documents
carefully.
What to check while
registering with a stock broker?
Every stock broker should be a member of a stock exchange and also registered
with SEBI. Examine the SEBI registration number and other relevant details
can be found out from the registration certificate issued by SEBI.
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