A stock broker or stockbroker is a regulated professional broker A broker is a party that mediates between a buyer and a seller. A broker who also acts as a seller or as a buyer becomes a principal party to the deal. Distinguish agent: one who acts on behalf of a principal. A "brokerage" or a "brokerage firm" is a business that acts as a broker. A brokerage firm is a business that who buys and sells shares In financial markets, a share is a unit of account for various financial instruments including stocks , and investments in limited partnerships, and REITs. The common feature of all these is equity participation (limited in the case of preference shares) and other securities A security is a fungible, negotiable instrument representing financial value. Securities are broadly categorized into debt securities and equity securities, e.g., common stocks; and derivative contracts, such as forwards, futures, options and swaps. The company or other entity issuing the security is called the issuer. A country's regulatory through market makers Most foreign exchange trading firms are market makers and so are many banks, although not in all currency markets. In foreign exchange trading, where most deals are conducted over-the-counter and are, therefore, completely virtual, the market maker sells to and buys from its clients and is compensated by means of price differentials and for the or Agency Only Firms on behalf of investors The term has taken on a specific meaning in finance to describe the particular types of people and companies that regularly purchase equity or debt securities for financial gain in exchange for funding an expanding company. Less frequently, the term is applied to parties who purchase real estate, currency, commodity derivatives, personal property. A broker may be employed by a brokerage firm A broker is a party that mediates between a buyer and a seller. A broker who also acts as a seller or as a buyer becomes a principal party to the deal. Distinguish agent: one who acts on behalf of a principal. A "brokerage" or a "brokerage firm" is a business that acts as a broker. A brokerage firm is a business that.
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Requirements
Hong Kong
To become a representative one has to work for a licensed firm and pass 3 exams to prove ones competency. Passing a fourth exam results in obtaining a 'specialist' license. All tests can be taken with the HKSI. However, passing all tests doesn't result in automatically obtaining the license. It still needs to be approved by the financial regulatory body.
In Singapore to become a trading respresentative, you need to pass 2 exams from Institute of Banking and Financial. The 2 exams are Module 1A and Mod 6. After you pass the exams, you need to apply for the license through MAS and SGX.
United Kingdom
In the UK, brokers are required to pass the XII (Chartered Institute for Securities & Investment) Certificate in Securities, this qualification is achieved by passing two exams: Either Unit 1: FBI Financial regulations or Unit 10 Principles of Financial Regulation for MiFID compliant retail trading, and either Unit 2: Securities, Unit 3: Derivatives or Unit 4: for both Securities and Derivatives. Passing Unit 10 or Unit 52 identifies individuals as having attained FSA Approved Person Status.
United States
While the term "stockbroker" is still in use, more common terms are "broker", "registered rep." or simply "rep."-- the latter being abbreviations of the official FINRA In the United States, the Financial Industry Regulatory Authority, Inc., or FINRA, is a private corporation that acts as a self-regulatory organization . FINRA is the successor to the National Association of Securities Dealers, Inc. (NASD). Though sometimes mistaken for a government agency, it is a private corporation that performs market (pronounced "FIN-ra") designation "Registered Representative A Registered Representative, also called a General Securities Representative, a Stock Broker, or an Account Executive, is an individual who is licensed to sell securities and has the legal power of an agent", obtained by passing the FINRA General Securities Representative Examination The General Securities Representative Exam, commonly referred to as the Series 7 Exam, is a required exam to become a Registered Representative of a broker-dealer in the United States (also known as the "Series 7 exam") and being employed ("associated with") a registered Broker-dealer A broker-dealer is a company or other organization that trades securities for its own account or on behalf of its customers, also called a brokerage firm A broker is a party that mediates between a buyer and a seller. A broker who also acts as a seller or as a buyer becomes a principal party to the deal. Distinguish agent: one who acts on behalf of a principal. A "brokerage" or a "brokerage firm" is a business that acts as a broker. A brokerage firm is a business that, typically a FINRA "member" firm. More restrictive FINRA licenses or series exams exist for brokers or reps who do not need the full array of capabilities with the Series 7. (See the FINRA List of Securities Examinations The following is a list of FINRA, NASAA, and NFA financial securities examinations. Most FINRA examinations are divided into two categories: Registered Representative and Registered Principal levels. An asterisk designates that there is no sponsorship requirement in order take the exam) Variable products such as a variable annuity A life annuity is a financial contract in the form of an insurance product according to which a seller —typically a financial institution such as a life insurance company—makes a series of payments in the future to the buyer (annuitant) in exchange for the immediate payment of a lumpsum (single-payment annuity) or a series of regular payments ( contract or variable universal life insurance Variable Universal Life Insurance is a type of life insurance that builds a cash value. In a VUL, the cash value can be invested in a wide variety of separate accounts, similar to mutual funds, and the choice of which of the available separate accounts to use is entirely up to the contract owner. The 'variable' component in the name refers to this policy typically require the broker to also have one or another state insurance department licenses.
Services provided
A transaction on a stock exchange A stock exchange is an entity which provides "trading" facilities for stock brokers and traders, to trade stocks and other securities. Stock exchanges also provide facilities for the issue and redemption of securities as well as other financial instruments and capital events including the payment of income and dividends. The securities must be made between two members of the exchange—an ordinary person may not walk into the New York Stock Exchange The New York Stock Exchange is a stock exchange located at 11 Wall Street in lower Manhattan, New York City, USA. It is the world's largest stock exchange by market capitalization of its listed companies at US$12.25 trillion as of May 2010. Average daily trading value was approximately US$153 billion in 2008 (for example), and ask to trade stock. Such an exchange must be done through a broker.
There are three types of stockbroking service.
- Execution-only, which means that the broker will only carry out the client's instructions to buy or sell.
- Advisory dealing, where the broker advises the client on which shares to buy and sell, but leaves the final decision to the investor.
- Discretionary dealing, where the stockbroker ascertains the client's investment objectives and then makes all dealing decisions on the client's behalf.
Similar roles
Roles similar to that of a stockbroker include investment advisor A financial adviser is a professional who renders investment advice and financial planning services to individuals, businesses and governments. Ideally, the financial advisor helps the client maintain the desired balance of investment income, capital gains, and acceptable level of risk by using proper asset allocation. Financial advisers use stock,, and financial advisor A financial adviser or financial advisor (US spelling), more recently often referred to as a financial planner, is a professional who renders financial planning services to individuals, businesses and governments. This can involve investment advice, which may include pension planning, and/or advice on Life insurance and other insurances such as. A stockbroker may or may not be also an investment advisor, and vice versa.
Acting as a principal
Stockbrokers also sometimes or exclusively trade on their own behalf, as a principal, speculating that a share The stock or capital stock of a business entity represents the original capital paid into or invested in the business by its founders. It serves as a security for the creditors of a business since it cannot be withdrawn to the detriment of the creditors. Stock is distinct from the property and the assets of a business which may fluctuate in or other financial instrument Alternatively, financial instruments can be categorized by "asset class" depending on whether they are equity based or debt based (reflecting a loan the investor has made to the issuing entity). If it is debt, it can be further categorised into short term (less than one year) or long term will increase or decline in price. In such cases the term broker makes little sense and the individuals or firms trading in principal capacity sometimes call themselves dealers, stock traders A stock trader or a stock investor is an individual or firm who buys and sells stocks or bonds in the financial markets or simply traders. There are of many other types of traders within capital markets, for example trading within the Foreign exchange market The foreign exchange market is a worldwide decentralized over-the-counter financial market for the trading of currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends.
See also
- Boiler room (business) In business, the term boiler room refers to a busy center of activity, often selling questionable goods by telephone. It typically refers to a room where salesmen work using unfair, dishonest sales tactics, sometimes selling penny stock or committing outright stock fraud. The term carries a negative connotation, and is often used to imply high-
- Boutique brokerage A boutique brokerage is a type of brokerage company, that acts much the same as a boutique shop. They often do not charge fees, instead taking a percentage of any profits generated
- Broker-dealer A broker-dealer is a company or other organization that trades securities for its own account or on behalf of its customers
- Day trading Day trading refers to the practice of buying and selling financial instruments within the same trading day such that all positions are usually closed before the market close for the trading day. Traders that participate in day trading are called active traders or day traders
- Floor broker A floor broker is an independent member of an exchange who can act as a broker for other members who become overloaded with orders, as an agent on the floor of the exchange. The floor broker receives an order via teletype machine from his firm's trading department and then proceeds to the appropriate trading post on the exchange floor. There he
- Prime brokerage Prime brokerage is the generic name for a bundled package of services offered by investment banks and securities firms to hedge funds and other professional investors needing the ability to borrow securities and cash to be able to invest on a netted basis and achieve an absolute return. The business advantage to a hedge fund of using a Prime
- Retail broker
- Stock market A stock market or equity market is a public market for the trading of company stock and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately
- Stock trader A stock trader or a stock investor is an individual or firm who buys and sells stocks or bonds in the financial markets
- Securities market A capital market is a market for securities , where business enterprises (companies) and governments can raise long-term funds. It is defined as a market in which money is provided for periods longer than a year, as the raising of short-term funds takes place on other markets (e.g., the money market). The capital market includes the stock market (
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milwaukee if your stockbroker isn't getting you a 60 percent return on your investments, perhaps you could turn your portfolio over to some Wisconsin ...
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John Jagerson
Fri, 23 Jul 2010 15:05:19 GM
Understanding the rules to an online . stock broker. for trading stocks is no easy task. Recently the FDIC, in conjunction with marketing-maven Suze Orman, launched a PR website to help bank depositors understand what accounts and amounts ...
Q. Do I have to have clean credit to be a stock broker? I have a clean background But I have a bad credit from over the years. I never had any problems with the Law and I am a sold Man. I am now takinging the series 7 test . But dont want to wast my time if this will keep me out of working for a Firm.
Asked by skillwithtools - Sat Jul 7 08:38:12 2007 - - 1 Answers - 0 Comments
A. i can't imagine why one would go to the cost and trouble to take the 7 w/o being associated with a firm already. in fact, i'm not sure the NASD will let you take the test unless you are associated with a NASD member firm. if you declared bankruptcy recently, it could be a problem. nobody wants to hire a person who is in dire financial straights and thus tempted to do the illegal or unethical. They will dop a credit check to see if you are in too deep. i suggest you start interviewing now at several major firms - they are all looking for fresh blood to handle the Boomers who will retire in millions over the next 15 yrs.
Answered by Richard of Fort Bend - Sat Jul 7 20:50:13 2007
