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.