Question:
A stock broker is typically a member of which entity?
A stock broker is typically a member of which entity?
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While brokers are regulated and registered by SEBI, their physical trading terminals are connected directly to the Stock Exchange of which they are active operational members.
Updated On: Jun 22, 2026
- Reserve Bank of India
- Ministry of Finance
- Stock Exchange
- Securities Appellate Tribunal
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The Correct Option is C
Solution and Explanation
Step 1: Defining the Role of a Stockbroker:
A stockbroker is a registered financial intermediary who is authorized to execute purchase and sale transactions in the secondary market on behalf of clients.
Step 2: Understanding Trading Terminals and Market Access:
Individual retail or institutional investors cannot access the order-matching engines of stock exchanges directly. Only registered corporate or individual clearing members are permitted to route orders to these systems.
Step 3: Identifying the Entity of Membership:
To acquire the right to execute client trades, a stockbroker must buy a trading membership or seat on a recognized Stock Exchange (C) (such as the National Stock Exchange of India, NSE, or the Bombay Stock Exchange, BSE) and comply with its operational guidelines.
A stockbroker is a registered financial intermediary who is authorized to execute purchase and sale transactions in the secondary market on behalf of clients.
Step 2: Understanding Trading Terminals and Market Access:
Individual retail or institutional investors cannot access the order-matching engines of stock exchanges directly. Only registered corporate or individual clearing members are permitted to route orders to these systems.
Step 3: Identifying the Entity of Membership:
To acquire the right to execute client trades, a stockbroker must buy a trading membership or seat on a recognized Stock Exchange (C) (such as the National Stock Exchange of India, NSE, or the Bombay Stock Exchange, BSE) and comply with its operational guidelines.
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