The Topic is related to Stock market and Financial Marketing Operation where you find the role of broker, sub broker, jobbers in money market

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Jai Narain Vyas University, Jodhpur
(Five Years’ Law Integrated Programme, Law Faculty)
Project Assignment Academic Year
2015-16
Subject: Financial Marketing Operations
Topic: “The Role of Brokers, Sub brokers, Jobbers, Portfolio and
Consultants in Security Exchange Market”
Submitted To: Submitted By:
Mr. Praful Nahta Sandeep K Bohra
B.B.A. LL.B. 4th
Semester
Roll No.: 20

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As a part of the BBA Curriculum and in order to gain practical
Knowledge in the field of management, we are required to
make a report on “Financial Marketing Operations”. The
Basic Objective behind doing this project report is to get
knowledge of different aspects of Core persons working for
the Continuance of Security Exchange Market.
In this project report we have included various concepts,
effects and implications regarding complexities and hardships
popped out in the working of Brokers, Sub brokers, Jobbers,
Portfolio and Consultants in Security Exchange Market.
Doing this Project report helped me to enhance my knowledge
regarding the work in to the role of Brokers, Sub brokers,
Jobbers, Portfolio and Consultants in making of effective and
tremendous profits in the Circumference of Stock Market.
Through this report I come to know about importance of hard
work, research work and role of devotion towards the work.
Date of Project Submission: ……/……/2015

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Synopsis
S. No Particulars Pg.
No.
1. Cover/ Introductory Page 1
2. Preface 2
3. List of Contents 4
4. Subject Matter of the project 5-9
5. Conclusion 10
6. Bibliography 11

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List of Contents
1. Role of Stockbroker in Stock Market .........................................................................................................................5
1.1 Who is Stock Broker?.................................................................................................................................................5
1.2 Limitations of Stock Broker?.....................................................................................................................................5
1.3 Are they governed by any Rules and Regulations? .................................................................................................5
1.4 How can be known that stockbroker is registered or not? .....................................................................................5
1.5 What are the documents to be signed with stock broker? ......................................................................................5
1.6 Education Qualification of Stockbrokers? ...............................................................................................................5
1.7 Eligibility Criteria for Stockbrokers?.................................................................................................................5
2. Role of Sub Stockbroker in Stock Market..................................................................................................................6
2.1 Who is Sub Stockbroker?...........................................................................................................................................6
2.2 What is the Registration Process of Sub Stockbroker?...........................................................................................6
2.3 What Documents to be submitted? ...........................................................................................................................7
2.4 What are the duties of Sub Stock brokers in Current Scenario?...........................................................................7
3. Role of Jobbers in Stock Market.................................................................................................................................7
3.1 Who is Jobber in Stock Market?...............................................................................................................................7
4. Role of Portfolio in Stock Exchange............................................................................................................................8
4.1 Definition of Portfolio in Finance..............................................................................................................................8
4.2 Description of Portfolio ..............................................................................................................................................8
4.3 Online Portfolio Facility by National Stock Exchange............................................................................................8
4.3.1 Portfolio Manager................................................................................................................................................9
4.3.2 Customized Market Watch.................................................................................................................................9
5. Role of Consultants in Security Exchange..................................................................................................................9
5.1 Definition of Consultants in Security Exchange ......................................................................................................9
5.2 Responsibility of Consultants/ Financial Advisor....................................................................................................9
5.3 Compensation for Consultants/ Financial Advisor..................................................................................................9
Conclusion ...........................................................................................................................................................................10
Bibliography........................................................................................................................................................................11

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1. Role of Stockbroker in Stock Market
1.1 Who is Stock Broker?
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 a stock exchange
or over the counter, in return for a fee or commission. Stockbrokers are known by numerous professional
designations, depending on the license they hold, the type of securities they sell, or the services they provide. It
is a money-cantered profession. Stock brokers are also known as Financial Advisors.
1.2 Limitations of Stock Broker?
As an agent the stock broker is merely performing a service for the investor. This means that the broker will buy
for the buyer and sell for the seller, each time making sure that the best price is obtained for the client.
An investor should regard the stockbroker as one who provides valuable service and information to assist in
making the correct investment decision. They are adequately qualified to provide answers to a number of
questions that the investor might need answers to and to assist in participating in the regional market.
1.3 Are they governed by any Rules and Regulations?
Stock brokers are governed by SEBI Act, 1992, Securities Contracts (Regulation) Act, 1956, Securities and
Exchange Board of India [SEBI (Stock brokers and Sub brokers) Rules and Regulations, 1992], Rules,
Regulations and Bye laws of stock exchange of which he is a member as well as various directives of SEBI and
stock exchange issued from time to time. Every stock broker is required to be a member of a stock exchange as
well as registered with SEBI. Examine the SEBI registration number and other relevant details can be found out
from the registration certificate issued by SEBI.
1.4 How can be known that stockbroker is registered or not?
Every broker displays registration details on their website and on all the official documents. One can confirm the
registration details on SEBI website. The SEBI website provides the details of all registered brokers. A broker’s
registration number begins with the letters “INB” and that of a sub broker with the letters “INS”.
1.5 What are the documents to be signed with stock broker?
Before start of trading with a stock broker, one is required to furnish his details such as name, address, proof of
address, etc. and execute a broker client agreement. One is also entitled to a document called ‘Risk Disclosure
Document’, which would give someone a fair idea about the risks associated with securities market. One need to
go through all these documents carefully.
1.6 Education Qualification of Stockbrokers?
It is technically possible to become a stockbroker without a college education. His example is, however, an
extremely rare event. For all practical purposes a stockbroker must have at least a bachelor's degree. Further,
candidates that have a Masters of Finance or a master's degree in a related field are in higher demand and tend to
receive higher compensation than bachelor's degree holders. In addition to an education background in finance,
brokerages must sponsor applicants in order for them to be able to take the required industry exams.
1.7 Eligibility Criteria for Stockbrokers?
At any point of time the applicant has to ensure that either the proprietor/one designated director/partner or the
Compliance Officer of the applicant entity should be successfully certified either in Securities Market (Basic)
Module or Compliance Officers (Brokers) Module or the relevant module pertaining to the segments wherein
membership of the Exchange has been sought.i.e. (The below norms would be a continued admittance norm for membership of the Exchange.)
 Capital Market (Dealers) Module
 Derivatives Market (Dealers) Module
 National Institute of Securities Markets (NISM) Series I – Currency

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 Derivatives Certification Examination
2. Role of Sub Stockbroker in Stock Market
2.1 Who is Sub Stockbroker?
A ‘Sub-Broker’ is any person who is not a Trading Member of a Stock Exchange but who acts on behalf of a
Trading Member as an agent or otherwise for assisting investors in dealing in securities through such Trading
Members.
All Sub-Brokers are required to obtain a Certificate of Registration from SEBI without which they are not
permitted to deal in securities. SEBI has directed that no Trading Member shall deal with a person who is acting
as a Sub-Broker unless he is registered with SEBI and it shall be the responsibility of the Trading Member to
ensure that his clients are not acting in the capacity of a Sub-Broker unless they are registered with SEBI as a
Sub-Broker.
It is mandatory for Trading Members to enter into an agreement with all the Sub-Brokers. The agreement lays
down the rights and responsibilities of Trading Members as well as Sub-Brokers.
2.2 What is the Registration Process of Sub Stockbroker?
Trading Members are requested to note the following with regards to Sub-Broker registrations:
 Members would continue to submit the Sub-Broker registration applications electronically through ENIT
(go to Sub-Broker master and click on ‘Fresh’) and ensure that the physical documents are received by
the Exchange within 7 days from submission of application in ENIT (In case of non-receipt of physical
documents by the Exchange within 7 days from submission of application in ENIT, the Reference Request
Number would be rejected in ENIT).
 Members would be informed through letter and bill vide FTP to make available in its Exchange Dues
Account the processing fee amounting to Rs. 2,000/- plus the applicable service tax for every Sub-Broker
registration application. Alternatively, the status of the Sub-Broker registration application would be
‘Documents Received’ in ENIT.
 In case of any deficiency in the application, the application form would be returned to the Member. In
case the Member desires to re-submit the same application vide ENIT after rectifying the deficiencies,
then the Member needs to go to the Sub-Broker master and click on the ‘Resubmit’ button. The Member
then needs to enter the ‘ENIT Reference Request Number’ and the details of that Sub-Broker registration
application would be displayed. The Member needs to check and update the details as required and then
submit the same to the Exchange. In such cases of re-submission, the Exchange would not charge the
Sub-Broker registration processing fee.
 In case of applications which are complete in all respects, Members would be informed through letter in
FTP asking them to make available the requisite SEBI registration fees in their Exchange Dues Account.
 The Exchange would start collecting the SEBI registration fees by debiting the Exchange Dues Account
of the Members for Sub-Broker applications which are processed and complete in all respect from the
very next day of intimation to the Member. In case the SEBI registration fees is not debited from the
Member’s Exchange Dues Account within 10 days from the date of intimation to the Member, then the
respective Sub-Broker application would be returned to the Member. In case of re-submission of such
applications, the Exchange would process the applications afresh.
 Status of applicants for which the applicable SEBI registration fees has been collected and recognized by
the SRC would be informed to the Members by way of display of ‘Date of Recognition’ through ENIT.
For cases where the applicant is not recognized by SRC or the Sub-Broker registration application has
been withdrawn by the Member, the Exchange would not refund the SEBI registration fee collected.
However, such fees would be adjusted towards subsequent Sub-Broker registration applications by the
same Member.

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 After the SRC has granted recognition, status of Sub-Broker applications uploaded by Exchange to SEBI
would be informed to Members by way of display of ‘Upload Reference Number’ and ‘Upload Date’
through ENIT within 3 days of upload by Exchange to SEBI.
 In case the Member applies for withdrawal of the Sub-Broker registration application after its recognition
by SRC or for cancellation of the application after it is registered with SEBI, then the Member would
need to procure the refund of the SEBI registration fees directly from SEBI.
 On receipt of the Sub-Broker registration certificate from SEBI, the details of registration number and
registration date would be made available to the Member through ENIT. The physical Sub-Broker
registration certificate would be forwarded to the Member for onward dispatch to the Sub-Broker.
 Partial or total amount collected towards SEBI registration fees would not be adjusted towards any other
dues payable to the Exchange.
 In case the Member applies afresh for SEBI registration for Sub-Broker applications returned to the
Member who have been derecognized since they were unable to provide necessary clarification as sought
by SEBI, within the time stipulated by SEBI, the Exchange would process such applications afresh.
2.3 What Documents to be submitted?
Members need to attach scanned copies and send physical copies of the following documents (as of the latest
date) along with the Sub-Broker registration application form:
 Proof of address of the applicant entity (trade name) – This is mandatory and the address on the proof
needs to match with that on the application. Only the latest telephone bill, electricity bill, valid ration card,
valid passport, valid driving license and bank statement of the last one month from a nationalized bank is
acceptable.
 Proof of experience certificate– This is mandatory only in case the qualification of
Individual/Partner/Director is less than HSC. Only experience of at least two years in the capacity of
employee/dealer in capital market in the name of Individual/Partner/Director is acceptable.
 Documents to be submitted along with print of ENIT application
 Model agreement between stock broker and sub broker.
2.4 What are the duties of Sub Stock brokers in Current Scenario?
The collective condemnation of corporate greed and share market speculation on the part of Wall Street share
brokers. Ever since the so called ‘American monetarist’ policies of Ronald Reagan were implemented, America
has been moving towards an increasingly speculative and unstable economy and now the common man in that
country has decided to put a stop to this process. However, in India, there is no such bitterness towards desi
institutions of stock trading and share brokers, (though scoffed at in certain social circles) aren’t exactly seen as
greedy fraudsters. However, that does not mean there are no rotten eggs in the basket. Therefore, in order to make
intelligent investments in the stock market and earn profits, investors, whether individuals or collectives, have to
understand how to deal with brokers/ sub-brokers in share market.
3. Role of Jobbers in Stock Market
3.1 Who is Jobber in Stock Market?
Jobbers, also called "stockjobbers," acted as market makers. They held shares on their own books and created
market liquidity by buying and selling securities, and matching investors' buy and sell orders through their
brokers, who were not allowed to make markets. The term "jobber" is also used to describe a small-scale
wholesaler or middleman in the retail goods trade.
Little is known about jobbers' activities because they kept few records, but in the early 19th century, London had
hundreds of jobbing firms. Jobbers' numbers declined dramatically over the course of the 20th century until they
ceased to exist in October 1986. This month was when the "Big Bang," a major shift in the London Stock

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Exchange's operations, occurred. London's financial sector was suddenly deregulated, fixed commissions were
replaced by negotiated commissions and electronic trading was implemented. (Investopedia, 2011) The jobbers
are also known as taravniwalla.
Figure 1Distinction between Brokers and Jobbers
4. Role of Portfolio in Stock Exchange
4.1 Definition of Portfolio in Finance
A portfolio is a collection of investments held by an investment company, hedge fund, financial institution or
individual.
In Finance, A grouping of financial assets such as stocks, bonds and cash equivalents, as well as their mutual,
exchange-traded and closed-fund counterparts. Portfolios are held directly by investors and/or managed by
financial professionals.
It is a generally accepted principle that a portfolio is designed according to the investor's risk tolerance, time
frame and investment objectives. The monetary value of each asset may influence the risk/reward ratio of the
portfolio and is referred to as the asset allocation of the portfolio. When determining a proper asset allocation one
aims at maximizing the expected return and minimizing the risk. This is an example of a multi-objective
optimization problem: more "efficient solutions" are available and the preferred solution must be selected by
considering a trade-off between risk and return.
4.2 Description of Portfolio
There are many types of portfolios including the market portfolio and the zero-investment portfolio. A portfolio's
asset allocation may be managed utilizing any of the following investment approaches and principles: equal
moron, capitalization-weighting, price-weighting, risk parity, the capital asset pricing model, arbitrage pricing
theory, the Jensen Index, the Treynor ratio, the Sharpe diagonal (or index) model, the value at risk model, modern
portfolio theory and others.
There are several methods for calculating portfolio returns and performance. One traditional method is using
quarterly or monthly money-weighted returns, however the true time-weighted method is a method preferred by
many investors in financial markets. There are also several models for measuring the performance attribution of
a portfolio's returns when compared to an index or benchmark, partly viewed as investment strategy.
4.3 Online Portfolio Facility by National Stock Exchange
National Stock Exchange provide online portfolio facility, named “MyNSE Portfolio Manager and
Customized Watch”. My NSE is a personalised Portfolio Manager that allows you to create your portfolio online
and match it against the live market rates. This is a free service. You need to register to create and access your
personalised portfolio. You can change your password and update your profile after you log-in using the
password.

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Following facilities are available under MyNSE:
 Portfolio Manager
 Customized Market Watch
4.3.1 Portfolio Manager
Portfolio Manager is a tool that allows you to value your holdings online. Using the MyNSE Portfolio Manager you can:
 Track your holdings in equities traded in the Capital Market segment of NSE.
 Create up to 3 portfolios with not more than 100 transactions in each portfolio.
 Add/ Modify /Delete transactions to an existing portfolio
 Modify / delete transactions in a portfolio
 View/ Rename / Delete the portfolio
 Set a portfolio as default portfolio (you will be taken to this portfolio when you login)
 Change the default settings of a portfolio
4.3.2 Customized Market Watch
Customized Market Watch is a tool that allows you to set up your own market watch both in Capital Market and Derivatives
segment. Using this you can:
 Track the movement of your holdings in equities and derivatives traded in NSE.
 Create upto 3 watches with not more than 25 securities / contracts in each watch.
 Add/ Modify /Delete securities / contracts to an existing watch
 View/ Rename/ Delete the watch
 Set a watch as default watch (you will be taken to this watch when you login)
 Change the default settings of a watch
5. Role of Consultants in Security Exchange
5.1 Definition of Consultants in Security Exchange
Consultants are one who provides financial advice or guidance to customers for compensation. Consultants are
also Knows as financial advisors (or advisers) can provide many different services, such as investment
management, income tax preparation and estate planning.
'Financial advisor' is a generic term with no precise industry definition, and many different types of financial
professionals fall into this general category. Stockbrokers, insurance agents, tax preparers, investment managers
and financial planners are all members of this group. Estate planners and bankers may fall under this umbrella,
as well. (Investopedia, 2011)
5.2 Responsibility of Consultants/ Financial Advisor
Financial advisors typically provide clients/customers with financial products and services, depending on the
licenses they hold and the training they have had. For example, an insurance agent may be qualified to sell both
life insurance and variable annuities. A broker may also be a financial planner. A financial advisor may create
financial plans for clients or sell financial products, or a combination of both.
5.3 Compensation for Consultants/ Financial Advisor
A financial advisor is generally compensated through fees, commissions, or a combination of both. For example, a financial
advisor may be compensated in one or more of the following ways:
 An hourly fee for advisory services

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 A flat fee, such as $500 per year, for an annual portfolio review or $2,000 for a financial plan
 A commission on the securities bought or sold, such as $12 per trade
 A commission (sometimes called a “load”) based on the amount invested in a mutual fund or variable annuity
 A “mark-up”: when one buys “house” products (such as bonds that the broker holds in inventory), or a “mark-
down” when they are sold
 A fee for assets under management, such as 1% annually of assets managed.
Conclusion
Financial advisers face a dilemma when investing in bonds that will likely offer diminishing returns. A lot of
advisers are sticking with a strategy they adopted years ago: keeping clients in short- and intermediate-duration
bonds, while shifting the more risk averse into a bit more cash.
“They’re trying to make some strategic decisions here in an environment that’s fluid and in some ways
unprecedented,” (Davis, 2009) Global chief economist at the Vanguard Group Inc.
According to the Jobs Rated Almanac, the number one spot belongs to financial advisors, out of 250 (156).
Increased interests in investments are resulting in rising employment opportunities for financial advisors. With
longer life expectancy rates, the baby boomers need to finance themselves for more years of retirement.
As a financial advisor, one can be well rewarded for his efforts. Sercurian, a financial company, says that, suppose
you are persistent, dedicated and achieve results, you will receive monetary rewards that enable you to pursue
your life goals.
Both spellings, advisor and adviser, are accepted and denote someone who provides advice. According to one
textbook, adviser and advisor are not interchangeable in the financial services industry, since the term adviser is
generally used "when referring to legislative acts and their requirements and advisor when referring to a
practitioner. Since [a financial advisor's practice] is never described as an advisory practice, advisor is preferable
when not referencing the law." Congress and the Securities Exchange Commission refer to "investment advisers"
when discussing regulation of them in the Investment Advisers Act of 1940.

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Bibliography
 Davis, J. (2009). Global chief economist at the Vanguard Group Inc.
 Investopedia. (2011, August Wednesday). Retrieved from Investopedia.com:
http://www.investopedia.com/terms/j/jobber.asp
 Investopedia, Portfolio definition and explanation, Retrieved July 2011
 Markowitz, H.M. (March 1952). "Portfolio Selection". The Journal of Finance 7 (1): 77-91
 Momentum Investment Strategies, Portfolio Performance, and Herding: A Study of Mutual Fund Behavior. Mark
Grinblatt, Sheridan Titman, Russ Wermers The American Economic Review, Vol. 85, No. 5 (Dec., 1995), pp.
1088-1105
 "Understanding Professional Designations". FINRA. Retrieved 8 November 2012.
 Taylor, Don (2005). C. Bruce Worsham, ed. Financial Planning: Process and Environment. Bryn Mawr, PA: The
American College Press. p. 9.3.
 "PLANNING ADVOCATES PUSH PROFESSIONALISM". ADVISOR.CA. Retrieved 22 March 2013.
 "Training, Education and Stockbroker Jobs". Stockbroker 101. Retrieved 2014-07-11.
 "Investor Information - Understanding Professional Designations – FINRA". Apps.finra.org. Retrieved 2012-10-
16.
 Graham, Benjamin (1949) "The Intelligent Investor"; pg 366 para 3rd
 www.en.wikipedia.orgfinancial adviser002