How to Become a Stock Broker in India

How to Become a Stock Broker in India: A Step-by-Step Guide

Are you interested to be stock broker in India? If so, you’ve come to the right place. In this comprehensive guide, we’ll walk you through the essential steps to kickstart your journey as a stock broker, from education and certification to licensing and honing the necessary skills. Let’s understand in detail!

Step-By-Step Admission Process to Become a Share Broker

Interested in becoming a stock broker? Follow these simple steps to kickstart your journey:

Step 1: Submit a New Membership Application

Begin by submitting a New Membership Application to the Membership Services Department at the National Stock Exchange (NSE).

Step 2: Approval Process

Once your application is received, it undergoes review by the Membership Services Department. If approved, it is then forwarded to the Membership Recommendation Committee and Membership Selection Committee.

Step 3: Evaluation by Selection Committee

The Membership Selection Committee evaluates your application and forwards it to the Member Compliance Department for further review.

Step 4: Provisional Membership Offer

Upon approval, you will receive an Offer Letter of Provisional Membership from the NSE.

Step 5: SEBI Registration

Submit the necessary documents to the Securities and Exchange Board of India (SEBI) for registration. Once approved, you will receive the SEBI Certificate, and the trading system will be provided to you.

What are the qualifications of a Share Broker ?

  • To begin your journey towards becoming a stock broker, start by completing your bachelor’s degree from a recognized university. While a finance-related degree is not mandatory, having a background in finance, economics, or commerce can give you a solid foundation for understanding the intricacies of the stock market.
  • Obtain a National Institute of Securities Markets (NISM) certification to validate your understanding of securities markets and regulatory frameworks. This certification is highly regarded in the industry and demonstrates your commitment to professionalism and excellence.

What is the salary of a Share Broker ?

The salary of a stock broker isn’t fixed; instead, they earn through brokerage commissions from their clients. Whenever clients buy or sell stocks, the broker receives a commission. This commission can range from ₹5000 to ₹100 Crores per month, depending on the number of clients they serve. The more clients they have and the more trades those clients make, the higher the commission the broker earns.

Other Qualification Criteria-

For entities seeking membership with the exchange, it’s mandatory for either the owner, a designated director/partner, or the compliance officer to be certified in one of the following modules:

  1. Securities Market (Basic) Module
  2. Compliance Officers (Brokers) Module
  3. Capital Market (Dealers) Module
  4. Derivatives Market (Dealers) Module
  5. National Institute of Securities Markets (NISM) Series I Currency Derivatives Certification Examination

This certification ensures compliance with regulatory requirements and expertise in handling securities and derivatives transactions.

Fees and Charges to become a Broker -

  • Application Processing Fees: ₹ 10,000+ Applicable Tax.
  • Admission Fees: 
    • For all segments (except “Only Debt”): ₹ 5,00,000 + applicable tax
    • For the “Only Debt” segment: ₹ 1,00,000 + applicable tax 
  • Annual subscription charges (Capital Market Segment): ₹ 50,000 p.a..+ Applicable Tax.
  • Minimum transaction charges (Futures & Options segment): ₹ 1,00,000 p.a. + Applicable Tax.
  • Transaction charges (Currency Derivatives segment) ₹ 50,000 p.a. + Applicable Tax.

Who cannot be a Share Broker ?

To become a stock broker, certain conditions must be met. Here are the simplified criteria:

  1. Bankruptcy or Insolvency: If you’ve been declared bankrupt or proven insolvent, you cannot become a stock broker.

  2. Compounded Debts: If creditors have compromised with you for not repaying debts fully, you are ineligible to become a stock broker.

  3. Fraud or Dishonesty: If you’ve been convicted of any offense related to fraud or dishonesty, you cannot pursue a career as a stock broker.

  4. Restricted Businesses: Engaging in businesses such as personal financial liability, merchant banking, underwriting, or investment advisory services may disqualify you from becoming a stock broker.

  5. Regulatory Actions: If you’ve been expelled from any stock exchange or debarred from trading in securities by regulatory authorities like SEBI or RBI, you are not eligible to become a stock broker.

Adhering to these conditions ensures integrity and trustworthiness in the stock broking profession.

Quick Summary

Becoming a stockbroker in India involves meeting several criteria:

  1. Age and Citizenship: You must be a 21-year-old Indian citizen.

  2. Education: Completion of at least 10+2 or higher secondary education is necessary.

  3. Experience: You need a minimum of 2 years of experience as a partner, authorized assistant, clerk, remisier, or apprentice to a stock broker.

  4. Salary: Stock brokers’ earnings are not fixed; they earn commissions and brokerage fees when clients buy or sell stocks.

  5. Certification: You must be certified in relevant modules such as Securities Market (Basic) or Compliance Officers (Brokers).

  6. Application Fees: There’s an application processing fee of ₹10,000 plus applicable taxes.

  7. Disqualifications: You cannot become a stock broker if you’ve been declared bankrupt, insolvent, convicted of fraud, or involved in dishonest practices.

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