How to become stock broker? – Eligibility and disqualifications

How to become stock broker?: A stock broker is the one that acts as a bridge between stock market and the investors. Stock broker facilitates the buying and selling services for the investors. They are the registered members of the stock exchanges. There’s a myth among the investors and general public that stock brokers make easy money and does not lose much in the event of market crash. However, there is very little truth in this. If you are someone who is familiar with the bulls and bears of stock market and confident of handling the strenuous job then this is a good to go. In this post we discuss how to become a stock broker step by step.

Assess yourself as to why you want to become a stock broker:

The process of becoming a stock broker begins with answering yourself the question why do I want to become a stock broker? The obvious reason in majority of the times is that stock broking is best way to make money. Apart from this other pre-requisites are ability to analyze current economic trends and other social-political events that shape the markets. You must be good at understanding the dynamics of stock market. Another requisite is that one should be able to invest huge money that run in lakhs to register as a stock broker.

  1. Choose one among the following after your self-assessment:

Stock broker:

One should be at least 21 years old while making an application to become a stock broker. The minimum academic qualification to become a stock broker is graduation and 2 years of experience as a partner with, or an authorized assistant or authorized clerk or remisier or apprentice to a stock broking firm/ individual broker. To become a stock broker your financial capacity should be good enough to invest in several lakhs. Brokers directly practice with the stock markets.

Sub-broker:

This is previous stage of being a broker. Sub-brokers practice on behalf of the stock brokers.  They do not have any direct membership of the stock exchange. However they trade under the membership of a registered stock broker. Minimum academic qualification to become a sub-broker is class 12.

Other Eligibility criteria:

At any point of time the applicant has to ensure that he is successfully certified either in Securities Market (Basic) Module or Compliance Officers (Brokers) Module or the relevant module pertaining to the segment applied for. i.e:

1 Capital Market (Dealers) Module
2 Derivatives Market (Dealers) Module
3 National Institute of Securities Markets (NISM) Series I – Currency
4 Derivatives Certification Examination

NISM Certifications:

To act as a stock broker in the respective segment, a person must possess a valid PAN Card and pass the following NISM Certification Examinations:

1 NISM Series XI: Equity Sales Certification Examination
2 NISM Series VIII: Equity Derivatives Certification Examination

Other information:

Stock brokers should be registered with stock exchanges and SEBI by paying the required amount of fee along with a valid application. A stock broker should act in accordance with the code of conduct as framed by SEBI. Following are not eligible to become a stock broker:

  1. A person who has been adjudged insolvent
  2. A person who has been convicted of an offence involving a fraud or dishonesty
  3. A person who has been expelled or declared a defaulter by any other Stock Exchange or debarred from trading in securities by an Regulatory Authorities like SEBI, RBI etc.
  4. A person who incurs such disqualification under the provisions of the Securities Contract (Regulations) Act, 1956 or Rules made there-under so as to disentitle such persons from seeking membership of a stock exchange