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NISM Certifications · NISM-Series-VII: Securities Operations and Risk Management · Introduction to Securities Broking Operations

A person wants to start a stock broking business and deal with clients on a recognised stock exchange in India. Which statement correctly describes the registration requirement?

A stock broker in India must hold a registration certificate from SEBI and be a member of a recognised stock exchange. Only then can it deal with clients on the exchange. RBI or depository registration does not authorise stock broking activity.

  1. AThe entity must obtain registration from SEBI as a stock broker and be a member of a recognised stock exchangeCorrect
  2. BThe entity needs registration only with the Reserve Bank of India
  3. CThe entity needs only a trading terminal supplied by any other broker, with no registration
  4. DThe entity needs registration from the depository alone

Explanation

Under the SEBI (Stock Brokers) Regulations, a person acting as a stock broker must hold a SEBI certificate of registration and be admitted as a member of a recognised stock exchange. RBI registration is not the route, and a depository has no role in broker registration.

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