How to become stock broker, sub-broker? – Check Eligibility

How to become stock broker?: A stockbroker is the one that acts as a bridge between the stock market and the investors. The 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 a market crash. However, there is very little truth in this. If you are someone who is familiar with the bulls and bears of the stock market and confident of handling the strenuous job then this is 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 is the majority of the time is that stockbroking is the best way to make money. Apart from this other pre-requisites are the ability to analyze current economic trends and other social-political events that shape the markets. You must be good at understanding the dynamics of the stock market. Another requisite is that one should be able to invest huge money that runs 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 stockbroker. The minimum academic qualification to become a stockbroker is graduation and 2 years of experience as a partner with, or an authorized assistant or authorized clerk or register or apprentice to a stockbroking firm/ individual broker. To become a stockbroker your financial capacity should be good enough to invest in several lakhs. Brokers directly practice with the stock markets.

Sub-broker:

This is the previous stage of being a broker. Sub-brokers practice on behalf of the stockbrokers.  They do not have any direct membership of the stock exchange. However, they trade under the membership of a registered stockbroker. The 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:

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

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

  • A person who has been adjudged insolvent
  • A person who has been convicted of an offense involving fraud or dishonesty
  • A person who has been expelled or declared a defaulter by any other Stock Exchange or debarred from trading in securities by Regulatory Authorities like SEBI, RBI, etc.
  • 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.

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