Professional Documents
Culture Documents
Brokerage Services
Brokerage Services
B R O K IN G S ER V IC ES
D efi
nition & Features
Stockbroker can be an individual or firm who
to carry on trade
Brokers can trade on behalf their clients
The relationship between broker and client is
segment.
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O rganizationalStructure
Managing
Director
VP Finance
AGM
Risk/settlement
VP
Distributions
AGM
Distribution
VP Operations
AVP
OPERATIONS
(RESEARCH
DEPT.)
VP
Systems
AGM
systems,
Internet
trading
HR
AGM
Training
Developme
nt
VP
Compliances
AGM
Legal
Co.
Secretary
BRANCH MANAGERS
M em
ber
shi
p
Corporate can become members of WDM
At least two partners of the firm/ two directors of the corporate should be
graduate
They must possess at least two years experience in securities market
The applicant/any of its partners/directors/ shareholders should not have
been declared as defaulters by the stock exchange
They should not have been debarred by SEBI from acting as intermediary
in the capital market
For F&O segment, at least two dealers should have passed SEBI approved
certification test for derivatives
A compliance officer is appointed
The minimum capital requirement of Rs.30 lakhs and the shareholding
by dominant promoter/shareholder group is at least 51% (40% in case
of listed companies) of paid-up equity capital of such corporate entity.
clearing banks
Clearing members are required to open a
position
All futures and option contracts are cash settled
The settlement amount is netted across all clients based
M argin Trading
Margin trading is purchasing securities by borrowing a portion
M argin Trading
Functions of Branches
Finance Management
Risk Management
Capital adequacy, margining, exposure and turnover limits
Compliance with the regulations prescribed by SEBI
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Pay-in /Pay-out
Timely pay-in and pay-out is important for a
broking company
A team of officials receives pay-in
The payments according to the payment dates
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Settlem ent
Funds clearing
Since the participants are having accounts with different
Clearing of securities
Clearing Corporation determines the funds/ securities
obligation
The clearing banks and depositories provide the
NSSCL
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DEPOSITORIES
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CLEARING BANK
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CUSTODIANS/ CMS
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and the Clearing Members/Custodians will affirm back to NSCCL. Based on the
confirmation, multilateral netting is applied by NSCCL and thereafter obligations
are determined.
Custodians.
credit its account and Clearing Bank will do the task immediately.
9. NSCCL advises Clearing Banks to credit account of custodians/CMs and debit its
Trading
Nationwide online fully automated screen-based
D efi
nition
Portfolio means total holding of securities
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D efi
nition
A Discretionary Portfolio Manager means a
portfolio manager
under
contract
management
discretion
as
exercises
to
the
any
to
portfolio
degree
investment
of
or
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W ho can render PM S?
SEBI authorised category I and II merchant
bankers
SEBI authorised portfolio managers
Discretionary Portfolio Managers
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O bjectives
Safety of Investment of Funds
Marketability
Liquidity
Reasonable Return
Appreciation in Capital
Tax Planning
Risk Avoidance
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O bligations
Must accept money or securities from clients for a period
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O bligations
Shall submit half-yearly audited financial
result to SEBI
Shall submit periodical report to SEBI
Funds of each client shall be managed
O bligations
Shall act in a fiduciary capacity with regard to the clients
funds
Shall transact in securities within the limitations placed by
funds or securities
Shall not pledge or give loan on securities held on behalf of
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O bligations
He shall ensure proper and timely handling
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conditions:
A. STOCK BROKERS
Membership in any stock exchange
Should abide by the rules, regulations and bye-laws of the
stock exchange.
Change of constitution requires prior approval of SEBI
Prescribed registration fee has to be paid
Establish grievance redressal mechanism to redress the
B. SUB-BROKERS
All Rules prescribed for stock brokers are
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Form D
Stock brokers should abide by the code of
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Form B
Application should be accompanied by a
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criteria:
Should be above 21 years of age
Should not be convicted of any offence involving fraud or
dishonesty
Should have passed at least 12th standard or equivalent
examination from institution recognized by the Government.
Should be a fit and proper person
All the partners of a partnership firm should comply with these
requirements
E
All clearing and trading members of a
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complied with
The applicant should be eligible to be admitted as a
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Competence of sub-broker
Should co-operate with the stock broker to which he
is affiliated
Protection of clients interest
Should not fail in meeting obligation with the broker
Execute legal agreement with the broker
Advertisement and publicity
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CapitalAdequacy N orm s
Minimum capital to be deposited with Mumbai
CapitalAdequacy N orm s
Additional optional capital related to business
Margin requirements
Monitoring arrangements
Penalties
Business exempt from capital requirements
Requirement of capital adequacy as an
underwriter
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D P Functions
As Depository Participants (DP), brokers are
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D P Functions
The applicant should belong to
D P Functions
a stock broker who has been granted a certificate of
registration by SEBI under sub-section (1) of section 12 of
the Act: Provided that:
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D P Functions
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D P Functions
controls
Reconciliation of accounts with depository
Submission of periodical returns to SEBI
Maintenance of records of services
Manner of keeping records
Maintenance of depository-wise records
Prohibition of assignment systems
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