What is a Stockbroker?
Stockbroker are individuals who buy and sell stocks and other securities for retail and institutional clients, through a stock exchange or over the counter, in return for a fee or a commission. Institutional stockbrokers work with fund managers and other financial institutions, but there are also retail investors.
Financial Analyst Working on a Computer with Multi-Monitor Workstation with Real-Time Stocks, Commodities and Exchange Market Charts. Businessman Works in Investment Bank Downtown Office at Night.
How are they regulated?
Stockbrokers are governed under the Securities and Exchange Board of India Act 1992, Securities Contract Regulations Act, 1956, and also the Securities and Exchange Board of India (Stockbrokers and sub-brokers Regulations), 1992. Stockbrokers are also regulated under other rules, regulations and bylaws that SEBI may issue from time to time. Every stockbroker in India needs to be a member of stock exchanges and also requires to be registered with SEBI. Stockbrokers display their registration details on their websites and even on official documents. One can also visit the Sebi website and find details of registered stockbrokers.
What skills does a Stockbroker need?
- The ability to work in a fast-paced environment
- Excellent communication and interpersonal skills, including strong negotiating and presentation skills
- The ability to use your initiative
- Ambition and determination
- The ability to accept criticism and work well lots of under pressure
- A natural sales ability
- Customer service skills
- Strong numeracy skills
- Analytical and research skills, as well as the ability to process and retain information quickly
- Time management skills
- Knowledge of economics and accounting
- The ability to build lasting relationships
- A disposition for taking risks
- The ability to persuade people and strong negotiation skills
- Decisiveness and the ability to solve problems.
How to Become a Stockbroker
While there are no specific schooling requirements for becoming a stockbroker, certain degrees or coursework can give you an advantage in the job.
You might want to consider a bachelor's degree in business. Many stockbrokers also have a master's in business administration (MBA) or a master's in finance. It also helps if you have some education in math, statistics, and analysis.
Stockbrokers often start working for a firm or bank in a role other than broker. Some even begin as college interns. That is where they gain know-how while they are on the job. To become a broker, they must show a deep understanding of money markets, laws, rules, and accounting practices.
Brokers need to pass the General Securities Representative Exam, commonly known as the “Series 7” exam, administered by the Financial Industry Regulatory Authority (FINRA). To take the exam, a person must be sponsored by a FINRA member firm or a member of a similar self-regulatory organization (SRO).
The Series 7 exam is hard and consists of 125 multiple-choice questions in 225 minutes. It combined with a separate Securities Industry Essentials Exam, which consists of 75 questions and lasts 105 minutes.
These exams will permit a broker to buy and sell most securities, but there may be other exams required to trade certain things. For example, someone who wants to buy and sell municipal bonds may have to take the Series 53 exam.9 There are also other required exams, including the Series 66 and Series 63 exams, to be registered in various states.
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