A Comparative Analysis of Stock Brokers in India

The stock exchange is a market place where the agents of buyers and sellers meet with each other through screen based trading. It is a centralised place where the prices of securities are determined by the forces of demand and supply. In other words, it is an organisation which provides platform to the buyers and sellers to make trades in the listed securities. In all stock exchanges the trading in listed securities is done by brokers and dealers. In simple terms stock exchange is nothing but the group of dealers and brokers who transact in listed securities. According to the securities Contracts (Regulation) Act, 1956, ―Stock exchange means anybody of individuals, whether incorporated or not, constituted for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities.‖ The stock brokers play an important role in the stock exchange. A stock broker is an individual who is professionally regulated by the stock exchange and also associated with the brokerage firm, does the work of buying and selling securities through stock exchange on behalf of retail as well as institutional investors in return for a commission or fees.

It is not possible for investors to trade without stock broker in the stock market. For any transaction in the stock exchange like buying and selling of securities or stocks requires an agent known as stock broker. The stock broker acts as an agent between the stock exchange and the investor in the stock market. The stock brokers are regulated and registered by the stock exchange and SEBI. Broadly, the stock brokers are divided into three categories which are as follows:- 1. Full service or Conventional Brokers:- The full service brokers are considered as traditional broker. They give a wide range of services under one umbrella. They offer trading facilities for stocks, commodities and currency derivatives, mutual funds, bonds, IPOs, and Insurance along with extra services like trading tips, superior analysis and guidance on investment in stocks, professional assistance on asset management etc. They charge more fees for their services than discount brokers. In India, we have more than 10,000 full service brokers offering different types of services along with trading facility. ICICI Direct, kotak Securities are some of the most popular full service brokers in India. 2. Discount Stock brokers (Flat fee brokers):- They offer only the trading facilities to the investors. It is well suited to those investors who understand the market well. They do not provide additional services to the investors like full service brokers. The fees or commission charged by the discount broker is much less than the full service brokers. They offer high speed and low brokerage trading facility to the investors trading in stocks, commodities and currency derivatives, mutual funds, bonds, IPOs, etc. They just enable the traders to trade in the stock market at minimum bare cost. They contribute around 10% of the

popular discount stock brokers in India. 3. Stock brokers offering 3 in 1 Accounts:- The Commercial banks provides saving bank account , demat account and trading facilities to trade on National stock exchange and Bombay Stock Exchange like full service broker. The basic requirement is to open a saving account in a bank which they link with the demat account. The brokerage charges are high alike full service charge brokers. The biggest advantage of 3 in 1 account is that the funds automatically get credited to the bank account of the investor in case of sale of securities.

The stock market is the barometer of an economy. The financial health of the country can be accessed through stock market. The Stock market mobilizes the savings of the investors and channelized into the profitable ventures. This function of stock market is performed by the stock brokers. It is not possible for any investor to invest in the stock market without the help of stock players. They are the key players in the stock market. The purpose of our study is make comparison among different stock brokers in terms of stock broker fees, brokerage charges and transaction charges.

The research is based on secondary data analysis. The data for our study was collected from different websites to gather information about the stock brokers. It is descriptive in nature and focuses on the stock broker fees, brokerage charges and transaction charges charged by different stock brokers. A chart of comparison is prepared on details pertaining to different stock brokers. Table1. Depicts the comparison of stock brokers

Source: www.chittorgarh.com

stock brokers in India. All the stock brokers in India are governed by the rules and regulations defined by the SEBI. In our study, we analysed the top 20 stock brokers in India comprises of Full service broker, Discount stock brokers and stock brokers offering 3 in 1 accounts. The stock brokers in India are very competitive in terms of the stock broker fees, brokerage charges and transaction charges. It is very difficult to rate them on the basis of these parameters because the knowledge, experience, skills and requirements differ from investor to investor. Hence, it is to be concluded that if you are an intraday trader and trade on a regular basis then high brokerage will affect your profit, it is better to have the services of discount stock broker. On the contrary, if you are new to the market and need guidance at every step you must go for full service brokers and if you don‘t want to transfer any amount to broker‘s account it‘s better to go for 3-in-1 account.

http://theindianstockbrokers.com/ http://www.chittorgarh.com/ http://www.topsharebrokers.com/ http://www.marketcalls.in/ https://en.wikipedia.org/wiki/Stockbroker

Research Scholar, Department of Commerce, University of Delhi E-Mail – ashoogoswami@gmail.com