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

A trading member wants to start acting as a stock broker on a recognised stock exchange in India. Which of the following is the registration requirement for carrying on this activity?

A stock broker must hold SEBI registration and also be a member of a recognised stock exchange. Exchange membership by itself is not sufficient, and neither RBI approval nor ROC registration substitutes for the SEBI certificate required to act as a broker.

  1. ARegistration as a stock broker with SEBI, in addition to membership of the stock exchangeCorrect
  2. BMembership of the stock exchange alone is enough
  3. CRegistration with the Registrar of Companies only
  4. DApproval from the Reserve Bank of India only

Explanation

Under the SEBI (Stock Brokers) Regulations, a person must hold a certificate of registration from SEBI and also be a member of a recognised stock exchange. Exchange membership alone does not authorise a person to act as a broker without SEBI registration. RBI approval and ROC registration do not serve as the broker registration.

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