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 through the exchange or over the counter in return. for fees or commissions. Stockbrokers are known by many professional designations, depending on the license they hold, the type of securities they sell, or the services they provide. In the United States, stockbrokers must pass Series 7 and Series 63 or Series 66 exams to be properly licensed.
Video Stockbroker
History
The first stock exchanges began in Rome, where the purchase and sale of the first recorded shares occurred in the 2nd century BC. After Rome fell, stock bets did not become realistic until after the Renaissance, when government bonds were traded in Italian city states like Genoa or Venice. The new stock market opened its doors in the 16th and 17th centuries, including the London Stock Exchange, which opened at a coffee shop in 1698. In the 1800s, in the United States, the New York Stock Exchange opened its doors under a wooden button tree in New York City. 24 stockbrokers signed the Buttonwood Agreement, agreeing to trade five securities under the button tree.
Maps Stockbroker
Licensing and training requirements
Canada
In Canada, a stockbroker is called "Registered Representative" or "Investment Advisor". To obtain a license as a Registered Representative and be eligible to offer investment advice and trade all instruments with derivative exclusions, the person employed by the investment company must have completed the Canadian Securities Course (CSC), Behavior & Practices Handbook (CPH), and the 90-day Investment Advisory Training Program (IATP). Within 30 months of obtaining their title as "Registered Representative", the applicants are then required to meet the requirements of post-licensing proficiency to complete the Wealth Management Essentials (WME) course. Registered Representatives are also required to complete 30 hours of professional development (product knowledge) and 12 hours of compliance training every three years of continuing education cycle as defined by the Industry Regulatory Agency of the Canadian Investment (IIROC). For option and/or futures trades, Registered Representatives must pass the Fundamental Derivatives Course (DFC) in addition to the Option License Course (OLC) and/or the FLC, or alternatively the Derivatives Fund of Fundamental Licensing Options Course (DFOL) for the option.
Hong Kong
To become a representative, one must work in a licensed company and pass 3 exams to prove one's competence. Pass the fourth exam result in obtaining a 'specialist' license. All tests can be done with HKSI. However, passing all the tests does not automatically generate the license. It still needs to be approved by the financial regulatory body.
India
Stockbrokers usually get a bachelor's degree in finance or business administration. The degree of finance prepares students to work as stockbrokers by focusing their studies on financial laws and regulations, methods of accounting and investment management. Students learn the principles of economics and currency, financial planning and financial forecasting. Workplace training programs are often available to prospective stockbrokers, allowing them to gain hands-on experience and work to obtain the necessary professional licenses.
Singapore
In Singapore, being a trade representative requires passing 4 exams, Modules 1A, 5, 6 and 6A, from the Banking and Finance Institute and applying for a license through MAS and SGX.
United Kingdom
Stockbroking is a regulated profession in the UK and brokers must achieve a recognized qualification from the Financial Conduct Authority (FCA) License Qualification checklist.
A number of qualifications available and required by trainees will depend on their duties and employers.
Qualifications include:
- CISI Level 4 Diploma in Investment Advice
- CISI Level 7 Diploma in Wealth Management
- The Chartered Institute for Securities and Investment (CISI) is the largest professional body in the UK for those working in the securities and investment industries. It evolved from the London Stock Exchange, has about 40,000 members in over 100 countries and provides over 37,000 exams each year.
CFA UK also offers qualifications. It represents the interests of about 11,000 investment professionals and is part of a network of CFA Institute members worldwide.
United States
While the term "stockbroker" is still in use, the more common terms are "brokers", "financial advisors", "registered representatives". or simply "rep." - The latter is the abbreviation of the official designation (FINRA) "Registered Representative," obtained by passing the FINRA Public Security Assurance Representative (also known as "Series 7 exam") and employed ("associated with") a registered broker-purchasing, also called a brokerage firm or (in the case of some bigger money broker/dealer) "wire house", usually a member company of FINRA. FINRA licenses or other series exams exist. People who hold some of these licenses, such as "Series 6", can not be called stockbrokers because they are prohibited from selling shares and are not trained or licensed under the various brokerages of Series 7 (see security check list). Selling variable products (such as variable annuity contracts or universal life insurance policy variables) usually requires the broker to also have one or more state department insurance licenses.
Related professions
A professional degree similar to a stockbroker including an investment adviser, and a financial adviser. A "financial advisor" may or may not be a stockbroker, as some Series 6 licensed individuals - prohibited from selling stocks - have them as their professional titles. An "investment advisor," a registered investment advisor, or an investment advisory advisor has the same training and skills as a stockbroker, but different licensing and different regulatory oversight. Many individuals hold both licenses, and may ordinarily manage commission-based accounts as stockbrokers and cost-based accounts as RIA investment advisers, or investment advisory representatives (IARs).
The Financial Industry Regulatory Authority (FINRA) provides online tools designed to help understand professional designations.
See also
- Boiler room (business)
- The boutique broker
- Floor broker
- Offshore stockbroker
- Online brokers
- The online trading platform
- Online trading portal
- Primary broker
- The securities market
- The stock market
- The stock market data system
- Share selection criteria
References
Best Broker in India Comparison
Source of the article : Wikipedia
0 Comments