Broker

A broker (or stockbroker) is a licensed intermediary registered with SEBI that facilitates the buying and selling of securities on stock exchanges. In India, brokers are members of NSE and/or BSE and provide investors with trading platforms, research, and order execution services.

Indian brokers broadly fall into two categories: full-service brokers (ICICI Direct, HDFC Securities, Kotak Securities) that offer research, advisory, and portfolio management alongside trading, and discount brokers (Zerodha, Groww, Upstox, Angel One) that offer low-cost execution without advisory services. Discount brokers have revolutionised Indian markets — Zerodha, founded in 2010, became the largest broker by active clients (over 1 crore) by charging a flat Rs 20 per executed order instead of percentage-based brokerage.

To open a trading account with a broker, investors need a Demat Account (held with a depository participant linked to NSDL or CDSL), PAN card, Aadhaar for eKYC, and a bank account for fund transfers. SEBI regulations require brokers to maintain client funds in separate accounts, submit daily margin reports, and comply with cyber security frameworks.

Brokerage charges in India include: per-order fees (Rs 0-20 for discount brokers), Securities Transaction Tax (STT — 0.1% on equity delivery buy and sell), exchange transaction charges (approximately 0.00345%), GST (18% on brokerage + transaction charges), and stamp duty (varies by state, typically 0.015% on buy side). For a Rs 1 lakh equity delivery trade on Zerodha, total costs are approximately Rs 115-130.

SEBI has progressively tightened broker regulations: peak margin reporting (2021), upfront margin collection, separation of client securities, and the prohibition of brokers pledging client shares. The regulator also mandates that brokers provide trade confirmation within 24 hours and contract notes within 24 hours of trade execution.