[Securities and Exchange Board of India (Stock Brokers) Regulations, 1992]
Stock broker is title to do trading i.e. sale or purchase in recognized stock exchange on its or on behalf of its client. The platform where trading happens is termed as “Recognized Stock Exchange”. Stock broker is required to take Membership of Recognized Stock Exchange then after only being trading member, stock broker can do trading. The recognized stock exchange in India as on 23rd March, 2021 are as follows:-
List of Stock Exchange:
- BSE Ltd
- Calcutta Stock Exchange Ltd
- India International Exchange (India INX)
- Indian Commodity Exchange Limited
- Metropolitan Stock Exchange of India Ltd
- Multi Commodity Exchange of India Ltd
- National Commodity & Derivatives Exchange Ltd
- National Stock Exchange of India Ltd
- NSE IFSC Ltd
Specialized and License to deal only on “Commodity Derivative”
Other Stock Exchanges are Licensed to Deal on the Following Segments:-
- Equity Derivative
- Currency Derivative (including interest rate futures)
- Commodity Derivative
Stock broker further need clearing rights too either being clearing member or self-clearing member to do trading clearing and settlements.
Broker itself can be clearing member or can do agreement with separate one to do activities of Clearing which means a person having clearing and settlement rights in any recognized clearing corporation.
No separate registration shall be required for stock broker registered with Board to act as clearing member. However it required approval of clearing corporation of which it is admitted as a member to do services of clearing member. An application for grant of a certificate of registration as clearing member shall be submitted to Board in Form AD of schedule I through the clearing corporation of which it is admitted as member. Further clearing corporation shall forward the application form to the Board as early as possible, but not later than 30 days from the date of its receipt.
List of Clearing Corporation in India:
- India International Clearing Corporation (IFSC) Limited
- Indian Clearing Corporation Ltd
- Metropolitan Clearing Corporation of India Ltd
- Multi Commodity Exchange Clearing Corporation Ltd
- National Commodity Clearing Ltd
- National Securities Clearing Corporation Ltd
- NSE IFSC Clearing Corporation Limited
Terminology to Note:
- Self-clearing member is a member of a clearing corporation which is also registered stock broker and clears and settles trades on its own account or on account of its clients only
- Small investor means any investor buying or selling securities on a cash transaction for a market value not exceeding INR 50,000/- in aggregate on any day as shown in a contract note issued by the Stock Broker.
- As per definition given in regulation stock broker is defined as person having trading rights in any recognized stock exchange and includes a trading member.