A stockbroker is an individual or company that buys and sells
stock
Stocks (also capital stock, or sometimes interchangeably, shares) consist of all the Share (finance), shares by which ownership of a corporation or company is divided. A single share of the stock means fractional ownership of the corporatio ...
s and other
investment
Investment is traditionally defined as the "commitment of resources into something expected to gain value over time". If an investment involves money, then it can be defined as a "commitment of money to receive more money later". From a broade ...
s for a
financial market participant in return for a
commission
In-Commission or commissioning may refer to:
Business and contracting
* Commission (remuneration), a form of payment to an agent for services rendered
** Commission (art), the purchase or the creation of a piece of art most often on behalf of anot ...
,
markup, or
fee. In most countries they are regulated as a
broker
A broker is a person or entity that arranges transactions between a buyer and a seller. This may be done for a commission when the deal is executed. A broker who also acts as a seller or as a buyer becomes a principal party to the deal. Neither ...
or
broker-dealer
In financial services, a broker-dealer is a natural person, company or other organization that engages in the business of trading securities for its own account or on behalf of its customers. Broker-dealers are at the heart of the securities and ...
and may need to hold a relevant license and may be a member of a
stock exchange
A stock exchange, securities exchange, or bourse is an exchange where stockbrokers and traders can buy and sell securities, such as shares of stock, bonds and other financial instruments. Stock exchanges may also provide facilities for ...
. They generally act as a
financial advisor
A financial adviser or financial advisor is a professional who provides financial services to clients based on their financial situation. In many countries, financial advisors must complete specific training and be registered with a regulatory ...
and
investment manager
Investment management (sometimes referred to more generally as financial asset management) is the professional asset management of various securities, including shareholdings, bonds, and other assets, such as real estate, to meet specified inve ...
. In this case they may also be licensed as a
financial adviser
A financial adviser or financial advisor is a professional who provides financial services to clients based on their financial situation. In many countries, financial advisors must complete specific training and be registered with a regulatory ...
such as a
registered investment adviser
A registered investment adviser (RIA) is a firm that is an investment adviser in the United States, registered as such with the Securities and Exchange Commission (SEC) or a state's securities agency. The numerous references to RIAs within the Inv ...
(in the United States).
Examples of professional designations held by individuals in this field, which affects the types of investments they are permitted to sell and the services they provide include
chartered financial consultants,
certified financial planners or
chartered financial analyst
The Chartered Financial Analyst (CFA) program is a postgraduate professional certification offered internationally by the US-based CFA Institute (formerly the Association for Investment Management and Research, or AIMR) to investment and financia ...
s (in the United States and UK),
chartered financial planners (in the UK).
In the United States, the
Financial Industry Regulatory Authority
The Financial Industry Regulatory Authority (FINRA) is a private American corporation that acts as a self-regulatory organization (SRO) that regulates member brokerage firms and exchange markets. FINRA is the successor to the National Associati ...
provides an online tool designed to help understand professional designations.
History of stock broking
The first recorded buying and selling of
shares
In financial markets, a share (sometimes referred to as stock or equity) is a unit of equity ownership in the capital stock of a corporation. It can refer to units of mutual funds, limited partnerships, and real estate investment trusts. Sha ...
occurred in
Rome
Rome (Italian language, Italian and , ) is the capital city and most populated (municipality) of Italy. It is also the administrative centre of the Lazio Regions of Italy, region and of the Metropolitan City of Rome. A special named with 2, ...
in the 2nd century BC. After the
fall of the Western Roman Empire
The fall of the Western Roman Empire, also called the fall of the Roman Empire or the fall of Rome, was the loss of central political control in the Western Roman Empire, a process in which the Empire failed to enforce its rule, and its vast ...
, stockbroking did not become a profession until after the
Renaissance
The Renaissance ( , ) is a Periodization, period of history and a European cultural movement covering the 15th and 16th centuries. It marked the transition from the Middle Ages to modernity and was characterized by an effort to revive and sur ...
, when government
bonds were traded in
Italian city-states
The Italian city-states were numerous political and independent territorial entities that existed in the Italian Peninsula from antiquity to the formation of the Kingdom of Italy in the late 19th century.
The ancient Italian city-states were E ...
such as
Genoa
Genoa ( ; ; ) is a city in and the capital of the Italian region of Liguria, and the sixth-largest city in Italy. As of 2025, 563,947 people live within the city's administrative limits. While its metropolitan city has 818,651 inhabitan ...
and
Venice
Venice ( ; ; , formerly ) is a city in northeastern Italy and the capital of the Veneto Regions of Italy, region. It is built on a group of 118 islands that are separated by expanses of open water and by canals; portions of the city are li ...
. In 1602, the Amsterdam Stock Exchange (now
Euronext Amsterdam
Euronext Amsterdam is a stock exchange based in Amsterdam, the Netherlands. Formerly known as the Amsterdam Stock Exchange (), it merged on 22 September 2000 with the Brussels Stock Exchange and the Paris Stock Exchange to form Euronext. The re ...
) became the first official
stock market
A stock market, equity market, or share market is the aggregation of buyers and sellers of stocks (also called shares), which represent ownership claims on businesses; these may include ''securities'' listed on a public stock exchange a ...
with trading in shares of the
Dutch East India Company
The United East India Company ( ; VOC ), commonly known as the Dutch East India Company, was a chartered company, chartered trading company and one of the first joint-stock companies in the world. Established on 20 March 1602 by the States Ge ...
, the first company to issue stock. In 1698, the
London Stock Exchange
The London Stock Exchange (LSE) is a stock exchange based in London, England. the total market value of all companies trading on the LSE stood at US$3.42 trillion. Its current premises are situated in Paternoster Square close to St Paul's Cath ...
opened at the
Jonathan's Coffee-House
Jonathan's Coffee House was a significant meeting place in London in the 17th and 18th centuries, famous as the original site of the London Stock Exchange.
The coffee house was opened around 1680 by Jonathan Miles in Change (or Exchange) ...
. On May 17, 1792, the
New York Stock Exchange
The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District, Manhattan, Financial District of Lower Manhattan in New York City. It is the List of stock exchanges, largest stock excha ...
opened under a
platanus occidentalis
''Platanus occidentalis'', also known as American sycamore, American planetree, western plane, occidental plane, buttonwood, and water beech, is a species of ''Platanus'' native to the eastern and central United States, the mountains of northeast ...
(buttonwood tree) in
New York City
New York, often called New York City (NYC), is the most populous city in the United States, located at the southern tip of New York State on one of the world's largest natural harbors. The city comprises five boroughs, each coextensive w ...
, as 24 stockbrokers signed the
Buttonwood Agreement
The Buttonwood Agreement is the founding document of what is now the New York Stock Exchange and is one of the most important financial documents in U.S. history. The agreement organized securities trading in New York City and was signed on May ...
, agreeing to trade five securities under that buttonwood tree.
Licensing and training requirements
Australia
Up until January 1, 2019, investment professionals that offer financial advice in
Australia
Australia, officially the Commonwealth of Australia, is a country comprising mainland Australia, the mainland of the Australia (continent), Australian continent, the island of Tasmania and list of islands of Australia, numerous smaller isl ...
had to pass training pursuant to
RG146. They must hold an
Australian Financial Services Licence
Australian Financial Services Licence (AFSL) is a legal licence provided by the Australian Securities and Investments Commission (ASIC) enabling the operation and activities of Australian financial services businesses. It is a legal requirement ...
that is overseen by the
Australian Securities and Investments Commission
The Australian Securities and Investments Commission (ASIC) is an independent commission of the Australian Government tasked as the national corporate regulator. ASIC's role is to regulate company and financial services and enforce laws to pro ...
. They are subject to
fiduciary
A fiduciary is a person who holds a legal or ethical relationship of trust with one or more other parties (legal person or group of persons). Typically, a fiduciary prudently takes care of money or other assets for another person. One party, ...
obligations.
As of 2019, Australia's biggest online stockbroker was
Commonwealth Securities, other large brokers were
ANZ Share Investing,
nabtrade and
Westpac Online Investing.
Canada
In
Canada
Canada is a country in North America. Its Provinces and territories of Canada, ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, making it the world's List of coun ...
, to be licensed as a "registered representative" or an "investment advisor" and thus be 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, the Conduct & Practices Handbook, and the 90-day Investment Advisor Training Program. Within 30 months of obtaining designation as a "registered representative", the registrant is further required to meet the post-licensing proficiency requirement to complete the Wealth Management Essentials course. 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. To trade options and/or futures, a registered representative must pass the Derivatives Fundamentals Course in addition to the Options Licensing Course and/or the Futures Licensing Course, or alternatively, the Derivatives Fundamentals Options Licensing Course for options.
Hong Kong
In
Hong Kong
Hong Kong)., Legally Hong Kong, China in international treaties and organizations. is a special administrative region of China. With 7.5 million residents in a territory, Hong Kong is the fourth most densely populated region in the wor ...
, to become a representative one has to work for a licensed firm and pass 3 exams to prove competency. Passing a fourth exam results in obtaining a "specialist" license. All tests can be taken with the Hong Kong Securities Institute. After passing all tests, approval must be received by the
Securities and Futures Commission
The Securities and Futures Commission (SFC) of Hong Kong is the independent statutory body charged with regulating the securities and futures markets in Hong Kong. The SFC is responsible for fostering an orderly securities and futures markets ...
.
India
Share brokers in
India
India, officially the Republic of India, is a country in South Asia. It is the List of countries and dependencies by area, seventh-largest country by area; the List of countries by population (United Nations), most populous country since ...
are governed by the
Securities and Exchange Board of India Act, 1992 and brokers must register with the
Securities and Exchange Board of India
The Securities and Exchange Board of India (SEBI) is the Regulatory agency, regulatory body for securities and commodity market in India under the administrative domain of Ministry of Finance (India), Ministry of Finance within the Government ...
(SEBI). The
National Stock Exchange of India
National Stock Exchange of India Limited, also known as the National Stock Exchange (NSE), is an Indian stock exchange based in Mumbai. It is the List of stock exchanges, 5th largest stock exchange in the world by total market capitalization, ...
and the
Bombay Stock Exchange
BSE Limited, also known as the Bombay Stock Exchange (BSE), is an Indian stock exchange based in Mumbai. It is the 6th largest stock exchange in the world by total market capitalization, exceeding $5 trillion in May 2024.
Established with t ...
via brokers, provide an ecosystem to investors to trade in capital markets through various channels - broker offices, investment advisor or screen-based electronic trading system. An individual employed by an investment firm must complete the National Institute of Securities Markets (NISM) exam and apply to SEBI for registration as an Investment Advisor.
Stock market advisory and research services are highly regulated in India. Only SEBI registered stock advisory and investment research analysts are allowed to do so. The complete details of these authorized persons are available on website of SEBI for protection of investors.
Ireland
The recognized benchmark designation for investment professionals in
Ireland
Ireland (, ; ; Ulster Scots dialect, Ulster-Scots: ) is an island in the North Atlantic Ocean, in Northwestern Europe. Geopolitically, the island is divided between the Republic of Ireland (officially Names of the Irish state, named Irelan ...
is the QFA ("qualified financial adviser") designation, which is awarded to those who pass the Professional Diploma in Financial Advice and agree to comply with the ongoing "continuous professional development" (CPD) requirements. The qualification, and attaching CPD program, meets the "minimum competency requirements" specified by the Financial Regulator, for advising on and selling five categories of retail financial products:
* Stock shares, bonds, and other investment instruments
* Savings, investments, and pensions
* Mortgage loans
* Consumer credit
* Life insurance
As of 2019,
Davy and
Goodbody were Irish largest stockbrokers.
New Zealand
In
New Zealand
New Zealand () is an island country in the southwestern Pacific Ocean. It consists of two main landmasses—the North Island () and the South Island ()—and List of islands of New Zealand, over 600 smaller islands. It is the List of isla ...
, the
New Zealand Qualifications Authority
The New Zealand Qualifications Authority (NZQA; ) is the New Zealand government Crown entity tasked with administering educational assessment and qualifications. It was established by the Education Act 1989.
NZQA administers the National Cert ...
oversees qualifications. The New Zealand Certificate in Financial Services (Level 5) is the minimum level of qualification necessary to offer investment advice.
Singapore
In
Singapore
Singapore, officially the Republic of Singapore, is an island country and city-state in Southeast Asia. The country's territory comprises one main island, 63 satellite islands and islets, and one outlying islet. It is about one degree ...
, 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.
South Africa
The
Johannesburg Securities Exchange rules require that member firms must be under the control of a "qualified stockbroker", who is also an
executive director of the firm; and branches, likewise managed.
The South African Institute of Stockbrokers (SAIS) offers the six exams required to become such, a Certified Stockbroker, or CSb(SA), following 3 years' work experience, and with other educational requirements met.
See also re. "Regulated Positions" and "Registered Persons" at
South African Institute of Financial Markets.
(SAIS also offers the Financial Markets Practitioner
vocational certification.)
South Korea
In
South Korea
South Korea, officially the Republic of Korea (ROK), is a country in East Asia. It constitutes the southern half of the Korea, Korean Peninsula and borders North Korea along the Korean Demilitarized Zone, with the Yellow Sea to the west and t ...
, the
Korea Financial Investment Association oversees the licensing of investment professionals.
United Kingdom
Stockbroking is a regulated profession in the
United Kingdom
The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Northwestern Europe, off the coast of European mainland, the continental mainland. It comprises England, Scotlan ...
and brokers must achieve a recognised qualification from the Appropriate Qualifications list of the
Financial Conduct Authority
The Financial Conduct Authority (FCA) is a financial regulatory body in the United Kingdom. It operates independently of the UK Government and is financed by charging fees to members of the financial services industry. The FCA regulates financi ...
(FCA).
The
Chartered Institute for Securities & Investment (CISI), established in 1992, is the largest UK professional body for investment professionals. It evolved from the London Stock Exchange, has around 45,000 members in over 100 countries and delivers more than 40,000 exams each year.
CFA UK also offers various FCA Appropriate Qualifications. It represents the interests of around 12,000 investment professionals and is part of the worldwide network of members of the
CFA Institute
The CFA Institute is a global, not-for-profit professional organization that provides investment professionals with finance education. The institute aims to promote standards in ethics, education, and professional excellence in the global investme ...
.
United States
The
Financial Industry Regulatory Authority
The Financial Industry Regulatory Authority (FINRA) is a private American corporation that acts as a self-regulatory organization (SRO) that regulates member brokerage firms and exchange markets. FINRA is the successor to the National Associati ...
, a
self-regulatory organization
Self-regulation may refer to:
*Emotional self-regulation
*Self-control, in sociology/psychology
*Self-regulated learning, in educational psychology
*Self-regulation theory (SRT), a system of conscious personal management
*Industry self-regulation, ...
, regulates investment professionals in the
United States
The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...
. Exams that individuals may take for accreditation include the
Series 7 exam
In the United States, the Series 7 exam, also known as the General Securities Representative Exam (GSRE), is a test for entry-level registered representatives, that demonstrates competency to buy or sell security products such as corporate securi ...
, the
Uniform Securities Agent State Law Exam (Series 63), the
Uniform Combined State Law Exam (Series 66), and the
Uniform Investment Adviser Law Exam (Series 65).
Individuals holding some of those licenses, such as the
Series 6 exam, cannot be called stockbrokers since they are prohibited from selling stocks. 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.
Individuals and firms are regulated by the
U.S. Securities and Exchange Commission and laws related to the
Investment Advisers Act of 1940 The Investment Advisers Act of 1940, codified at through , is a United States federal law that was created to monitor and regulate the activities of investment advisers (also spelled "advisors") as defined by the law. Passing unanimously in both t ...
, including laws related to
fiduciary
A fiduciary is a person who holds a legal or ethical relationship of trust with one or more other parties (legal person or group of persons). Typically, a fiduciary prudently takes care of money or other assets for another person. One party, ...
.
See also
*
Boiler room (business)
*
Floor broker
A floor broker also known as a "Pit broker" is an independent member of an exchange who can act as a broker on the trading floor. They would act on behalf of floor traders or large clients such as financial firms, as an agent on the floor of th ...
*
Mutual fund
A mutual fund is an investment fund that pools money from many investors to purchase Security (finance), securities. The term is typically used in the United States, Canada, and India, while similar structures across the globe include the SICAV in ...
*
Prime brokerage
Prime brokerage is the generic term for a bundled package of services offered by investment banks, wealth management firms, and securities dealers to hedge funds which need the ability to borrow securities and cash in order to be able to inves ...
*
Securities market
Security market is a component of the wider financial market where securities can be bought and sold between subjects of the economy, on the basis of demand and supply. Security markets encompasses stock markets, bond markets and derivatives ma ...
*
Stock market data systems Stock market data systems communicate market data—information about securities and stock trades—from stock exchanges to stockbrokers and stock traders.
History
The earliest stock exchanges were in France in the 12th century and in Bruge ...
*
Stock trader
A stock trader or equity trader or share trader, also called a stock investor, is a person or company involved in trading equity securities and attempting to profit from the purchase and sale of those securities. Stock traders may be an inve ...
*
Stock valuation
Stock valuation is the method of calculating theoretical values of companies and their stocks. The main use of these methods is to predict future market prices, or more generally, potential market prices, and thus to profit from price movement � ...
References
{{Authority control
Financial services occupations