THE BROKERAGE INDUSTRY

The stock-broking business has undergone a sea change over the last decade. The three main

factors behind the changes in the stock-broking business are:

First, the shift from floor-based to screen-based trading in 1994. This brought transparency into

trade execution and raised the confidence of investors. The result has been lower transaction

charges and increased convenience. This has helped both the investors and the brokers.

The second change was dematerialization. Dematerialization is a process of converting physical

share certificates into electronic shares. This saves time and money.

The introduction of futures and options was the third major factor that has changed the face of

the stock-broking business as it is a new avenue for revenue.

In actuality the brokerage industry continues to develop rapidly. Many of the traditional

restrictions against banking activities within the brokerage industry are being eliminated and the

barriers are disappearing. Due to this, some commercial banks have as subsidiaries, brokerage

houses that offer discounts and some of them have available accounts that offer all of the

services that are offered by a checking account.

“The basic function of a brokerage firm is to execute buy and sell orders for clients”.
Traditionally these firms have offered the investigation of the quality and the possibilities of
investing in a variety of investment products. It is still accustomed for brokerage firms