Stockbroker

A stockbroker or share broker 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. In the United
States, a stockbroker must pass both the
Series 7 and either the Series 63 or the
Series 66 exams in order to be properly
licensed.
Stockbroker

A Bloomberg Terminal stockbroker with a multi-

monitor workstation.

Occupation

Names Stockbroker, investment

advisor

Occupation type Profession

Activity sectors Finance

History
Courtyard of the Amsterdam Stock Exchange (Beurs

van Hendrick de Keyser) by Emanuel de Witte, 1653.

The process of buying and selling the VOC's shares (on
the Amsterdam Stock Exchange) became the basis of
the world's first official stock market.[1][2][3]

The first stockbroking began in Rome,

where the first recorded buying and selling
of shares occurred in the 2nd century BCE.
After Rome fell, stockbroking did not
become a realistic career until after the
Renaissance, when government bonds
traded in Italian city-states such as Genoa
or Venice. New stock exchanges opened
their doors in the 16th and 17th centuries,
including the London Stock Exchange,
which was opened at a coffee shop in
1698.[4] In the 1800s, in the United States,
the New York Stock Exchange opened its
doors under a buttonwood tree in New
York City. 24 stockbrokers signed the
Buttonwood Agreement, agreeing to trade
five securities under that buttonwood tree.
[5]

Licensing and training

requirements
Canada
In Canada, a stockbroker is called a
"Registered Representative" or an
"Investment Advisor". To be licensed as a
Registered Representative and thus
qualified to offer investment advice and
trade all instruments with the exception of
derivatives, an individual employed by an
investment firm must have completed the
Canadian Securities Course (CSC), the
Conduct & Practices Handbook (CPH), and
the 90-day Investment Advisor Training
Program (IATP). Within 30 months of
obtaining their designation as a
"Registered Representative", the registrant
is further required to meet the post-
licensing proficiency requirement to
complete the Wealth Management
Essentials course (WME). A Registered
Representative is also required to
complete 30 hours of professional
development (product knowledge) and 12
hours of compliance training every three
year continuing education cycle as set out
by the Investment Industry Regulatory
Organization of Canada (IIROC). To trade
options and/or futures, a Registered
Representative must pass the Derivatives
Fundamentals Course (DFC) in addition to
the Options Licensing Course (OLC)
and/or the Futures Licensing Course (FLC),
or alternatively, the Derivatives
Fundamentals Options Licensing Course
(DFOL) for options.[6][7][8]

Hong Kong

To become a representative one has to

work for a licensed firm and pass 3 exams
to prove one's 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.

India
Stockbrokers typically earn a bachelor's
degree in finance or business
administration. A finance degree prepares
students to work as stockbrokers by
focusing their studies on financial laws
and regulations, accounting methods and
investment management. Students study
the principles of economics and currency,
financial planning and financial
forecasting. On-the-job training programs
are often available to aspiring
stockbrokers, which allow them to gain
practical experience and work towards
earning the required professional
licenses.[9].
Singapore

In Singapore, becoming a trading

representative requires passing 4 exams,
Modules 1A, 5, 6 and 6A, from the Institute
of Banking and Finance and applying for
the license through MAS and SGX.

United Kingdom

Stockbroking is a regulated profession in

the UK and brokers must achieve a
recognised qualification from the Financial
Conduct Authority (FCA)'s Appropriate
Qualifications list.
A number of qualifications are available
and the one a trainee does will depend on
their duties and their employer.

Qualifications include:

CISI Level 4 Diploma in Investment

Advice
CISI Level 7 Diploma in Wealth
Management
The Chartered Institute for Securities
and Investment (CISI) is the largest UK
professional body for those who work in
the securities and investment industry. It
evolved from the London Stock
Exchange, has around 40,000 members
 in over 100 countries and delivers more
than 37,000 exams each year.

CFA UK also offers qualifications. It

represents the interests of around 11,000
investment professionals and is part of the
worldwide network of members of the CFA
Institute .

United States

While the term "stockbroker" is still in use,

more common terms are "broker",
"financial advisor", "registered rep." or
simply "rep." — the latter being
abbreviations of the official [10] (FINRA)
designation "Registered Representative",
obtained by passing the FINRA General
Securities Representative Exam (also
known as the "Series 7 exam") and being
employed ("associated with") a registered
broker-dealer, also called a brokerage firm
or (in the case of some larger money
center broker/dealers) a "wirehouse",
typically a FINRA member firm.[11] Other
FINRA licenses or series exams exist.
Individuals holding some of those
licenses, such as the "Series 6", cannot be
called stockbrokers since they are
prohibited from selling stock and are not
trained or licensed in the full array of
capabilities of a Series 7 stockbroker (see
list of securities examinations). Selling
variable products (such as a variable
annuity contract or variable universal life
insurance policy) typically requires the
broker to also have one or another state
insurance department licenses.

Related professions
Professional titles similar to that of
stockbroker include investment advisor,
and financial advisor. A "financial advisor"
may or may not be a stockbroker, since
some Series 6 licensed individuals—who
are prohibited from selling stock—have
that as their professional title. An
"investment advisor", registered
investment advisor, or investment advisor
representative has training and
capabilities similar to that of a
stockbroker, but different licensing and
different regulatory oversight. Many
individuals hold both licenses, and might
typically manage commission-based
accounts as a stockbroker and fee-based
accounts as an RIA investment advisor, or
investment advisor representative (IAR).

The Financial Industry Regulatory

Authority (FINRA) provides an online tool
designed to help understand professional
designations.[12]
See also
Wikimedia Commons has media related to
Stockbrokers.

Boiler room (business)

Boutique brokerage
Floor broker
Offshore stock broker
Online broker
Online trading platform
Online trading portal
Prime brokerage
Securities market
Stock market
 Stock market data systems
Stock selection criterion

References
1. Brooks, John: The Fluctuation: The Little
Crash in '62, in Business Adventures:
Twelve Classic Tales from the World of Wall
Street. (New York: Weybright & Talley, 1968)
2. Shiller, Robert (2011). Economics 252,
Financial Markets: Lecture 4 – Portfolio
Diversification and Supporting Financial
Institutions (Open Yale Courses).
[Transcript]
3. Stringham, Edward Peter (5 October
2015). "How Private Governance Made the
Modern World Possible" . Cato Unbound
(www.cato-unbound.org). Retrieved
15 August 2017.
4. "Stockbroker 101 - A Cool History" .
Stockbroker 101. Retrieved September 15,
2016.
5. "History of the NY Stock Exchange" .
Library of Congress. May 2004. Retrieved
September 15, 2016.
6. "CSI Career Map - CSI Global Education" .
Csi.ca. 2011-11-29. Retrieved 2012-10-16.
7.
http://www.iiroc.ca/industry/continuingedu
cationmember/Documents/CE-
Requirements-Category_en.pdf
8. "Continuing Education & Member
Resources" . Iiroc.ca. Retrieved 2012-10-16.
9. "Stock Broker Training Programs and
Requirements" .
10. "FINRA.org" .
11. "List of Members - #" . FINRA. Retrieved
2012-10-16.
12. "Investor Information - Understanding
Professional Designations – FINRA" .
Apps.finra.org. Retrieved 2012-10-16.

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