It is quite obvious that a stockbroker is an organization or an individual who is specifically licensed and can take part in the market of securities in place of customers. A stockbroker performs the job of an agent. As soon as the stockbroker plays the part of an agent for the sellers and purchasers of securities, they realize the commission for providing this kind of service.
The stockbroker by discharging the services of an agent is simply carrying out a service in favor of the investor. By this, it is meant that the broker can purchase on behalf of the buyer and can sell in place of the seller and makes it certain that the best stock broker in India achieves better cost for the customer. However, there are various parameters as per which you can say the service provider as the best one but usually it is about service, advise and operational matters where the performance of the service provider is measured.
On the other hand, the investor is needed to look upon the stockbroker as an individual who offers priceless service and valuable information to aid in taking an accurate decision regarding investment. The stockbrokers are sufficiently well qualified to proffer replies to a lot of queries that may be bothering the investor and are in dire need of a response from them and lend a helping hand in taking part in the market.
Rules and Regulations that govern the stockbrokers
They are governed by laws that have been enacted by Securities Contracts Act, SEBI Act, rules and regulations pertaining to stock brokers and sub-brokers, laws and bye-laws concerning stock exchange. The broker is a member there and is many other directives given time to time by SEBI as well as stock exchange. Every stockbroker is needed to have attained the membership in the stock exchange and is registered member of SEBI. The investor should confirm the registration number given by SEBI and other useful details may be obtained by checking the registration certificate that is issued through SEBI.
Ways to confirm if a broker is registered
It is a common practice of the stockbroker to display his registration particulars via their website and also on other official documents. If you visit the SEBI website, you can easily verify the stockbroker’s registration particulars. It can be confirmed by the technique that the registration number of a broker starts with “INB” whereas the sub-brokers begins with “INS.”
The documents you have to sign with the stockbroker
Before beginning trading through the stockbroker, the investor is needed to put forward all the particulars for example address, name, address proof, etc. and effect an agreement between the client and the broker. The customer also has a right to collect a document that is known as “risk disclosure document” that will bring home to you a good idea regarding the risks that are inherent to the securities market. You are recommended to read all the contents therein thoroughly before signing the same.