The benefits of securities trading
Brokerage activity is work related to the execution of transactions of a civil law nature. In recent years, the securities market for a market economy has become one of the most important institutions for attracting investment in the economic sectors that most need it.
Such a wave of capital is possible for longer periods than bank loans, and the interest is often much lower than the interest set by banks. It follows that the securities market has become a distribution mechanism, involving the financial turnover funds of companies and government structures, as well as the general population.
Accumulation of the capitals of the above subjects and their involvement in the company is carried out by issuing blocks of shares and then distributing them among investors. You can also view Top 8 Forex Brokers in South Africa.
The line of contacts in the stock market is not only limited to the issuer and the investor (seller and buyers respectively), but also includes:
- Banks serving both parties monitor the fulfillment of obligations and make cash payments.
- Depositaries providing services to transaction counterparties, registering ownership of shares and transacting with them.
- Registrars. Open the register of all owners of securities, maintain a register of shareholders, and monitor compliance with their rights.
- Stock brokers and dealers. Serve as parties to the transaction or are proxies of the participants.
- Trade organizers. Create the conditions necessary for closing an investment transaction.
- Brokerage activity is the provision of professional services by sales agents who conduct specific business activities. They play an important role in the mechanism for selling securities.
- An economic institution that sells securities and acts as an intermediary between the buyer and seller must establish strict legal regulations. A contract that allows a broker to buy / sell securities on behalf of a client has a specific legal structure.
RIGHTS AND OBLIGATIONS OF BROKERS
Broker has the right to:
- Consider, use and retain cash and securities of customers intended for investment or obtained from the sale of customer shares, if the contract provides for this.
- Act as an underwriter when investing stocks.
- To participate in advisory activities on investing / buying / selling securities.
- Perform other contractual transactions and transactions.
- The broker’s client base can be either legal entities or individuals registered as private entrepreneurs. Customers are responsible for accounting for transactions involving their property and finances.
- A financial broker does not make tax payments on behalf of their clients. However, this does not apply to persons who are not registered as private entrepreneurs, as well as to legal persons who are not residents of the Russian Federation.
Each quarter, stock brokers provide economic tax authorities with information on each of the balance sheets managed by a brokerage specialist.
After the end of each reporting period established by the customer for settlement with government agencies (monthly or quarterly), the intermediary must provide economic reports to the customers on the individual (separate) balance of the amounts charged by the Ministry of Finance of the Russian Federation are established for corporate tax charges.
The main job of a broker to protect the interests of clients is the need to provide clients with a quarterly statement of all cash and securities transactions.