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Stock Broker Financial Intermediaries or Market Intermediaries role in share market

  1. Stock Markets Basic
    1. Invest:3 benefits of investing for your future
    2. Types of Investment Diversification asset classes
    3. What is the share market? What Does It Do and How Does It Work with examples
    4. SEBI What is Securities and Exchange Board of India
    5. Stock Broker Financial Intermediaries or Market Intermediaries role in share market
    6. Depository and types of Depository Participants in India
    7. ICCL, NSE Clearing Limited and Bank’s role as Financial intermediary
    8. Angel Investors What are their roles with examples
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Marketopedia / Stock Markets Basic / Stock Broker Financial Intermediaries or Market Intermediaries role in share market

Corporate entities collaborate to ensure transactions in the market are smooth. From logging into a trading terminal to having shares credited to your DEMAT account, the collaborative effort of market intermediaries guarantees a flawless transaction.

These entities remain out of sight, yet in compliance with SEBI regulations. They ensure a streamlined experience when trading on the share market. They are called Financial Intermediaries or Market Intermediaries.

These interdependent financial intermediaries create a system in which financial markets can operate. We will now examine some of the major players in this ecosystem and their respective roles.

  • The Stock Broker 

The stockbroker is an important figure in the financial world. They are responsible for providing advice and buying and selling stocks on behalf of their clients. They analyse investments, make financial recommendations and provide counsel to investors.

A stockbroker is a crucial financial intermediary. They are corporate entities that hold a stockbroking license granted by SEBI after thorough analysis of their credentials and due diligence. It is also imperative that they abide by all the regulations relevant to them as decreed by SEBI.

A stockbroker provides you with direct access to transact in the share markets. To initiate an investment, you must open an account with one of many registered brokers in India. Before settling on a particular broker, individuals usually apply personal preferences and compare based on popular questions like –

  • How simple is the platform?
  • How efficient is their support system? 
  • How easily can I access reports like Profit & Loss reports, Tradebook records, and Tax P&L documents with this access?
  • Broker’s net worth as it should be profitable and have a positive record of profits and losses. 
  • What are the broker’s initiatives in educating the users? Just like Stoxbox has these series of articles which provide an in-depth knowledge about investments. 

Once you’ve chosen your broker and opened a trading and DEMAT account, you can begin your journey into the share market. With the account setup complete, you have multiple options for interacting with your broker.

You can contact your broker, providing your client code, to place an order for your transaction. The dealer on the other end will execute it and give confirmation of the status while you are still on the call.

Do-it-yourself or DIY is a frequently used mode of trading in the markets. Your broker provides you with a Trading Terminal to access the market. Here, after logging in, you will be able to view live prices from the market as well as place orders yourself. 

Experienced users can gain access to the market through APIs. Certain brokers provide these APIs for a set price.

Brokers offer key services, such as:

  • Access to markets which enable us to transact. 
  • Margins for trading. We will further delve into the topic later 
  • Issuing contract notes for the transactions- To give you context, a contract note is a written confirmation of all transactions on an – everyday basis.
  • Streamline the flow of money between your trading and bank accounts. 
  • Call and trade support, customer service for answering queries and informing about the market. 

You can avail call and trade services, along with futures and options with Stoxbox. 

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    Attention Investors

    1. Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020.
    2. Update your mobile number & email Id with your stock broker/depository participant and receive OTP directly from depository on your email id and/or mobile number to create pledge.
    3. Pay 20% upfront margin of the transaction value to trade in cash market segment.
    4.  Investors may please refer to the Exchange’s Frequently Asked Questions (FAQs) issued vide circular reference NSE/INSP/45191 dated July 31, 2020 and NSE/INSP/45534 dated August 31, 2020 and other guidelines issued from time to time in this regard.
    5. Check your Securities /MF/ Bonds in the consolidated account statement issued by NSDL/CDSL every month.

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    Investor Alert:

    1. Prevent Unauthorised Transactions in your demat account –> Update your Mobile Number with your Depository Participant. Receive alerts on your Registered Mobile for all debit and other important transactions in your demat account directly from CDSL on the same day………………….issued in the interest of investors.
    2. KYC is one time exercise while dealing in securities markets – once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary.
    3. No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor’s account.

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