The following figure shows the three operators at the Stock Exchange −

 

Operators at Stock Exchange

Broker

As studied earlier, no one can deal directly in stock exchange and every intended seller or buyer, who wants to sell or buy securities has to deal through members known as brokers. Broker is duly certified by SEBI (Stock and Exchange Board of India) under its 1992 rule. Membership of the stock exchange is restricted to prescribed numbers of members, to financially sound persons who have sufficient experience in dealing in securities.

 

A broker cannot buy or sell securities on his personal capacity. He charges commission from the parties, sellers, and buyers and deals on the behalf of his non-member clients.

 

Sub-broker

Sub-brokers are non-members of the stock exchange and deal only on behalf of the members or registered brokers. Commission is received by sub-brokers on the business procured by them out of total commission received by the brokers. Sub brokers are known as “half commission men” and “remisiers” too.

 

Jobbers

Jobbers are the independent dealers, who deal in securities at their own. A jobber cannot sell or buy securities on the behalf of others, but he deals in securities for his own profit through fluctuation of the prices. Difference between sale price and purchase price of securities is the profit of a jobber.