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A Stock Broker License is a registered professional who acts as an agent on behalf of their clients and investors to purchase or sell shares or stocks in the secondary market. Stock Brokers have authorized a person who as a result of registration with the authorities has the right to perform such functions. No unregistered person can perform such functions.
A stockbroker is required to have the following qualities:
They provide these services and are paid through brokerage either for every transaction or for total trade value.
Stock Broker License As per Securities Contracts (Regulations) Rules, 1957, a stockbroker is a person having trading rights in any of the recognized stock exchange and includes a trading member.
Stock Broker License In order to be able to register as a Stock Broker, the applicant is required to submit an application. On receiving such application the board shall take the following into consideration:
Also, Read: Stock Broking License: An Overview.
As we have discussed, in order to operate as a Stock Broker License one is required to obtain registration under SEBI.
However the person is already admitted as a member in one stock exchange, then no separate registration is required under SEBI to operate in more than one stock exchange. But, for this purpose, they are required to ask for approval from such other stock exchanges.
Applicant while submitting the application shall submit the fees as mentioned in the Schedule III of the regulations.
However, the Board can grant an extension of 6 months from the date the fees becomes due after sufficient cause is being shown justifying the same.
Stock Broker Registration procedure includes the following steps:
Step1: A duly filled application in Form A provided in Schedule I am required to be submitted to the Stock Exchange where it wishes to be admitted as a member.
Step2: Within 30 days of receiving the application the stock exchange is required to forward the same to the Securities Exchange Board of India.
Step3: After due analysis of the application if the Board is of the opinion that all the conditions mentioned under Regulation 5 are satisfied, the certificate of registration is issued and the stock exchange is intimated of the same effect.
Step4: If the Board is not satisfied with the contents of the application when such refusal is to be communicated to the applicant and to the stock exchange as well within 30 days from the date of refusal. However, the applicant must be provided an opportunity of being heard.
Step5: Any applicant with the rejected application has an option to reapply within 30 days from the date of intimation of such rejection, which will be considered by the Board and decision will be communicated.
Recommended Article: Requirements for Portfolio Manager Registration.
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