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Brokers and Brokerage Business



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The definition of *Stock Broker* is:

A stockbroker is a regulated professional individual, usually associated with a brokerage firm or broker-dealer, who buys and sells stocks and other securities for both retail and institutional clients.

Stock Broking Companies earn money primarily by way of providing a platform / facility for its clients to trade upon.

Some stock brokers also provide advisory services and other value added services (such as by offering other financial service products such as loans, insurance policies etc.)

Some stock brokers act as agents to sell IPOs, FPOs and such issues from where they get some commission.

Most stock broking companies also have a tie-up with NBFC companies so as to offer additional services like loan against shares, margin funding, housing finance.

Starting July 1, 2017, stock brokers are not allowed to use the funds of their client in any manner. In simple words, brokerage proprietor funds are kept separate from client funds.

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