There are eight stock exchanges in India, out of which the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) are the two prominent ones. If you wish to invest in the share market, you must do it via these stock exchanges. However, as per the Securities and Exchange Board of India (SEBI) guidelines, a common man cannot trade directly with the stock exchanges.
Published on 01 March 2023
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Instead, they need to do it through one of the authorised stockbrokers. These stockbrokers act as middlemen between the investors and stock exchanges and facilitate buying and selling of the shares. This article defines stockbrokers, their role in the stock market, and the types of stockbrokers in India. Let’s get started.
Who is a Stockbroker?
As mentioned, a stockbroker acts as a middleman between an investor and the stock exchanges. They are financial professionals who execute trade orders in the stock market on behalf of their clients or investors. A stockbroker is also known as a financial market representative or an investment advisor.
The primary role of a stockbroker is to place buy and sell orders in the share market on behalf of the investors. They also provide expert advice to their clients regarding market dynamics and investment decisions. A stockbroker can work as an individual or as a part of a brokerage firm.
What Are the Services Offered by a Stockbroker?
Stockbrokers charge a nominal fee from their clients in lieu of their services. Apart from facilitating buying and selling of shares in the share market, stockbrokers offer a range of services to their clients, such as:
Investment advisory services
Stockbrokers possess knowledge and expertise related to the working of the stock market, performance of stocks, market predictions, and so on. Besides, they have access to the market database and research findings of brokerage firms with which they are associated. That is why they can provide excellent investment advice to their clients.
Portfolio management services
Stockbrokers also provide portfolio management services to their clients. They analyse the investor’s investment objectives and use their expertise to create an investment portfolio to fulfil those objectives. They also ensure that the investment portfolio of their clients coincides with their risk profile.
Limited banking services
Some stockbrokers also provide limited banking services to their clients, such as Demat accounts, electronic deposits, and withdrawals. For example, investors can open a Demat account with a stockbroker and use it to sell/purchase shares in the share market. They can also deposit and withdraw money from their account according to their convenience.
What Are the Different Types of Stockbrokers in India?
Now that you know the definition of stockbroker and the services offered by them let’s look at the different types of stockbrokers in India. Based on the services they provide; stockbrokers are primarily classified into two types:
1.Full-service stockbrokers
Full-service stockbrokers are traditional stockbrokers that provide an array of products and services to their clients. These services may include buying and selling of stocks in the stock market, investment advisory, portfolio management, retirement planning, and tax-saving advisory, among others.
Given the wide range of services they offer, full-service stockbrokers charge hefty fees from their clients. These stockbrokers are useful for high net-worth individuals and those who don’t have an in-depth knowledge of the market.
2.Discount stockbrokers
Discount stockbrokers have increased in number as well as popularity in the last few years. They have come into existence mainly due to the increased use of the internet for share trading. These stockbrokers are also known as online stockbrokers.
Discount stockbrokers usually do not offer any investment advisory to their clients. All they provide is an online platform to place buy or sell orders in the stock exchanges. Hence, they charge fewer commissions from their clients, which are mostly flat fees. Also Read: Low Brokerage & Low Cost Discount Brokerage
Conclusion
With the emergence of the internet, many people have started trying their hands in the stock market. Stockbrokers play a crucial role by facilitating buying and selling of stocks in the stock exchanges. They also provide advisory services which might help their clients create a robust investment portfolio as per their financial goals and risk appetite.
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There are around 9 stock exchanges in India offering a secure trading platform to investors. These include the National Stock Exchange (NSE India), Bombay Stock Exchange (BSE), Calcutta Stock Exchange (CSE), India International Exchange (India INX), Multi Commodity Exchange of India (MCX), National Commodity and Derivates Exchange (NCDEX), Indian Commodity Exchange Limited (ICEX), Metropolitan Stock Exchange of India Limited (MSE), and National Stock Exchange IFSC Limited.
Have you ever thought of investing in the stocks of foreign companies? As per the Reserve Bank of India (RBI), you can invest up to 250 million US Dollars in foreign equity instruments in a year. But, are you aware of the methods through which you can do so?
To be a successful share market investor, you need to understand various investment options available to you like shares, bonds, debentures, etc. Of these, shares offer an opportunity to earn good returns on your investments. However, before you start your journey as a share market investor, it is important to understand what you are investing in.
Full-service stockbrokers are suitable for investors who want expert guidance for making their investment decisions. They are also useful for high-net-worth individuals who need someone to manage their investment portfolio.
As per the SEBI guidelines, a retail investor is not allowed to trade directly in the stock market. Instead, they need to do it through a SEBI-registered stockbroker who acts as a middleman between the investor and the stock exchange.
Full-time stockbrokers charge a fixed percentage of the total value of the securities traded by their clients. It can be between 0.25% to 0.75%. Discount brokers charge a flat fee from their clients against every transaction. It can be as low as ₹10.
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What is National Stock Exchange (NSE)?
There are around 9 stock exchanges in India offering a secure trading platform to investors. These include the National Stock Exchange (NSE India), Bombay Stock Exchange (BSE), Calcutta Stock Exchange (CSE), India International Exchange (India INX), Multi Commodity Exchange of India (MCX), National Commodity and Derivates Exchange (NCDEX), Indian Commodity Exchange Limited (ICEX), Metropolitan Stock Exchange of India Limited (MSE), and National Stock Exchange IFSC Limited.
Have you ever thought of investing in the stocks of foreign companies? As per the Reserve Bank of India (RBI), you can invest up to 250 million US Dollars in foreign equity instruments in a year. But, are you aware of the methods through which you can do so?
To be a successful share market investor, you need to understand various investment options available to you like shares, bonds, debentures, etc. Of these, shares offer an opportunity to earn good returns on your investments. However, before you start your journey as a share market investor, it is important to understand what you are investing in.
Full-service stockbrokers are suitable for investors who want expert guidance for making their investment decisions. They are also useful for high-net-worth individuals who need someone to manage their investment portfolio.
As per the SEBI guidelines, a retail investor is not allowed to trade directly in the stock market. Instead, they need to do it through a SEBI-registered stockbroker who acts as a middleman between the investor and the stock exchange.
Full-time stockbrokers charge a fixed percentage of the total value of the securities traded by their clients. It can be between 0.25% to 0.75%. Discount brokers charge a flat fee from their clients against every transaction. It can be as low as ₹10.
Sharekhan Comtrade Private Limited (TM) operates the web site accessible from the URL www.myespresso.com (the “web site”').
Sharekhan Comtrade Private Limited is committed to protecting your privacy and utilising technology that gives you the most powerful, safe, online experience that you can get anywhere else.
Sharekhan Comtrade Private Limited does, however, gather certain information that is provided by you to the Web Site. Sharekhan Comtrade Private Limited believes that by collecting this information Sharekhan Comtrade Private Limited is able to provide you with a personalised web experience, and to assist its own sales team and advertisers in efficiently reaching an appropriate audience.Sharekhan Comtrade Private Limited does, however, gather certain information that is provided by you to the Web Site. Sharekhan Comtrade Private Limited believes that by collecting this information Sharekhan Comtrade Private Limited is able to provide you with a personalised web experience, and to assist its own sales team and advertisers in efficiently reaching an appropriate audience.
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The following discloses Sharekhan Comtrade Private Limited's information gathering and dissemination practices for the Web Site:
System Data:
Sharekhan Comtrade Private Limited uses your IP address to help diagnose problems with our server and to administer the web site. Your IP address is used to identify you and your shopping cart and to gather broad demographic information.
Registration Data:
The Web Site's registration form may require users to give us contact information (like their name, phone number and e-mail address), unique identifiers (like their PAN Number) and demographic information (like their pin code, age or income level). The Web Site uses customer contact information from the registration form to send the users information about Sharekhan Comtrade Private Limited and promotional material from some of Sharekhan Comtrade Private Limited's partners. The customer's contact information is also used to contact the visitor when necessary. Unique identifiers (such as PAN numbers) are collected to verify the user's identity. Demographic and profile data is also collected at the Web Site. We use this data to tailor the visitor's experience at the Web Site, showing them contents that we think they might be interested in, and displaying the contents according to their preferences. This information is shared with advertisers on an aggregate basis.
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This site contains links to other Web Sites which are not necessarily been screened or reviewed by www.myespresso.com. Sharekhan Comtrade Private Limited is neither responsible for the privacy practices or the contents of such Web Sites nor shall be held answerable for the inaccurate, inappropriate or offensive data, material, information, products and services that may be viewed on those sites.
Sharekhan Comtrade Private Limited may operate a number of co-branded sites. Policies regarding information collection and sharing may differ on some of these co-branded sites. If you have any particular questions, you should check the privacy statement that appears on each co-branded site.
Order Forms:
The Web Site uses an order form for customers to request information, products and services. The Web Site collects visitors' contact information (like their mobile number or e-mail address), unique identifiers (like their PAN number) financial information (like their account or credit card numbers) and demographic information (like their pin code, age or income level). Contact information from the order form is used to send orders, information about Sharekhan Comtrade Private Limited, and promotional material from some of Sharekhan Comtrade Private Limited's partners to the visitors of the Web Site. The visitor's contact information is also used to get in touch with the visitor when necessary. Financial information that is collected is used to check the users' qualifications and bill the user for products and services. Unique identifiers (such as PAN numbers) are collected from Web Site visitors to verify the user's identity.
Surveys and Contests:
The Web Site's online surveys ask visitors for contact information (like their mobile number or e-mail address) and demographic information (like their pin code, gender, age or income level). The Web Site uses contact data from its surveys to send the user information about Sharekhan Comtrade Private Limited and promotional material from some of Sharekhan Ltd.'s partners. The customer's contact information is also used to contact the visitor when necessary. Users may opt-out of receiving future mailings; see the choice/opt-out section below. Demographic and profile data is also collected at the Web Site. The Web Site use this data to tailor its visitor's experience at the Web Site, showing them content that it thinks they might be interested in, and displaying the content according to their preferences. This information is shared with advertisers on an aggregate basis.
Sharekhan Comtrade Private Ltd run contests on the Web Site in which we ask visitors for contact information (like their e-mail address). Sharekhan Comtrade Private Limited uses contact data from its contests to send users information about Sharekhan Comtrade Private Ltd. and promotional material from some of our partners. The customer's contact information is also used to contact the visitor when necessary. Users may opt-out of receiving future mailings; see the choice/opt-out section below.
Third-Party Advertisement Servers:
Sharekhan Comtrade Private Limited engages the services of an outside advertisement company to display advertisement on the Web Site. These advertisements may contain cookies. While Sharekhan Comtrade Private Limited uses cookies in other parts of the Web Site, cookies received with banner advertisements are collected by the Advertisement company, and Sharekhan Comtrade Private Limited does not have access to this information.
Protection of your Data and Information:
The privacy and protection of your data and information provided to us is of vital importance. Sharekhan Comtrade Private Limited shall ensure to safeguard the security and confidentiality of any information you share with us. Any personally identifiable information of the customers obtained by us shall not be used or shared other than for the purposes to which the customers consents. However security and confidentiality of information cannot be guaranteed cent percent. Hence despite our utmost efforts to protect your personal information, Sharekhan Comtrade Private Limited and www.myespresso.com cannot warrant the security of any information you transmit to us through our online services. Such transmission of your personal information is done at your own risk.
Disclosure of Customer Information :
Sharekhan Comtrade Private Limited and www.myespresso.com shall not deliberately disclose customer's personally identifiable information to any unauthorized third person, save and except where such information shall be disclosed in good faith and for the purpose of law for the time being in force or to protect the rights and property of Sharekhan Comtrade Private Limited and www.myespresso.com.
Public Forums :
The Web Sites makes chat rooms, forums, message boards and/or news groups available to its users. Please remember that any information that is disclosed in these areas becomes public information and you should exercise caution when deciding to disclose your personal information.
Supplemental Information :
The Web Site supplements the information that you provide with information that is received from third parties.
The Web Site DOES NOT entice by the prospect of a special game, prize or other activity, to divulge more information than is needed to participate in the activity.
Further to the above, in light of the recently notified Information Technology (Reasonable security practices and procedures and sensitive personal data or information) Rules, 2011. (Hereinafter referred to as the Rules)
The following shall be deemed to be sensitive information :
Password;
Financial information such as Bank account or credit card or debit card or other payment instrument details;
Physical, physiological and mental health condition;
Sexual orientation;
Medical records and history;
Biometric information;
Any detail relating to the above clauses as provided to body corporate for providing service; and
Any of the information received under above clauses by body corporate for processing, stored or processed under lawful contract or otherwise:
provided that, any information that is freely available or accessible in public domain or furnished under the Right to Information Act, 2005 or any other law for the time being in force shall not be regarded as sensitive personal data or information for the purposes of Rules.
Collection of Information:
Compliance with KYC guidelines as per SEBI / Exchanges / Or any other Act, law or regulation requiring the same and any internal KYC guidelines formulated by Sharekhan Comtrade Private Limited.
In order to provide enhanced trading experience to the client.
In order to provide any further information to be provided to regulators.
Such information may be collected in a manner that the client is always aware of the collection and purported usage of the same. The client shall have an option to withdraw consent to share the information. However such intimation shall be required in writing. Such intimation shall only be taken into account from the date on which the same is received. Sharekhan Comtrade Private Limited may choose to stop services to such a client in case such intimation is received. Such information shall only be used for the purpose it is collected.
Clients would be allowed an option not to disclose any information to be collected, provided the same is in compliance with regulatory requirements.
Disclosure of information:
Disclosure of sensitive information would be as per the terms agreed by the clients. For any change in such terms, the clients would be informed.
Provided no consent may be required in case the same is being shared as per compliance guidelines or as required by regulators.
Any information being disclosed to third parties would be in accordance with the Rules and would be done provided such third party has the same level of compliance guidelines as Sharekhan Comtrade Private Limited.
Sharekhan Comtrade Private Limited shall allow clients to review their personal information and the same shall be allowed to be edited provided exchange guidelines relevant to the same are followed.
Sharekhan Comtrade Private Limited shall maintain reasonable security practices and procedures and maintain a comprehensive documented information security programme. In the event of an information security breach, Sharekhan Comtrade Private Limited or a person on its behalf shall be required to demonstrate as and when called upon to do so by the agency mandated under the law, that there have implemented security control measures as per their documented information security programme and information security policies and information security policies that contain managerial, technical, operational and physical security control measures that are commensurate with the information assets being protected with the nature of business.
KYC Languages
Download Client Registration Documents (Rights & Obligations, Risk Disclosure Document, Do's & Don't's) in Vernacular Language :
Note: "This document is a translated version of the client registration documents in English and is being provided in vernacular language to facilitate better understanding by the investors. In case of any ambiguity, the contents of the English version would prevail."
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