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The stock markets in India are governed by the provisions of Securities and Exchange Board of India Act, 1992. The Securities Exchange Board of India constituted under SEBI Act, 1992 exercises overall superintendence over the stock exchanges under the Securities Contracts (Regulation) Act, 1956. SEBI was constituted on 21st February, 1992, with the twin objectives of regulation and development. The present broker regulations are by and large sufficient to protect the needs of the investors.
There are stock exchanges recognized under Securities Contract (Regulation) Act, 1956 which are the exclusive centres for trading of securities. Most of the stock exchanges in India are organized as mutuals which is considered beneficial in terms of tax benefits and matters of compliance. The trading members, who provide broking services also own, control and manage the exchanges. The trading platform of an exchange is accessible only to brokers. Demutualised exchange allows free entry and exit of brokers. The broker enters into trades in exchanges either on his own account or on behalf of his clients.
Brokers deal with secondary markets for the sale and purchase of securities such as stocks and bonds. Trading is done in various ways such as it may occur on a continuous auction basis; it may involve brokers buying from and selling to dealers in stock markets. The stock exchanges differ from country to country in eligibility requirements and in the degree to which the govt. participates in their management.
‘Broker’ as defined in the Concise Law Dictionary means a middleman or agent who, for a commission on the value of the transmission, negotiates for others the purchase or sale of stocks, bonds, commodities or property of any kind, or who attends to the doing of something for another. Thus, brokers are the people who deal in shares and whose business includes the procuring of subscribers for shares. They are basically intermediaries in the secondary market and are middlemen between the investors and stock exchanges. They reflect the deal by transferring the stock and shares. They bring funds from investors to the stock exchanges. One category of intermediaries are stock brokers and sub brokers.
Securities Exchange Act, 1934 defines the term Broker as anyone, other than a bank, engaged in the business of effecting securities transactions for the account of others. In other words, brokers form a sub-class of dealers and include anyone who is in the business of effecting securities transactions as agents for others. Broker is an intermediary who is associated with securities market and is registered under Section 12 of the SEBI Act, 1992.
Unlike other brokers, stock broker is frequently entrusted with the possession of securities and may even take and transfer them without the name of the principal appearing in the transaction. He often pays the price in advance and then receives payment from the client. Thus, stock broker acts as a bailee as well as an agent. SEBI requires that the agreement between a stock broker and an investor is to be in writing and the agreement should be executed on stamp paper of atleast Rs.20. In K. Appa Rao v. Gopal Doss it was held by the Madras HC that when an agent is authorized to negotiate and complete a sale for a specified price within a particular time, it gives him an authority to enter into a contract for sale, whether for movable or immovable property.
Further, ‘Brokerage’ is a commission paid to a bank, stock-broker, or other marketing intermediary for placing shares on a best effort basis or for inducing a broker’s clients or customers to subscribe for the company’s shares or other securities and is lawful if reasonable in amount. In other words, brokerage is a fee or commission given to or charged by a broker. When the owner of the property employs a broker to find a purchaser and he agrees to compensate him therefor, the consideration is known as Brokerage Commission. The listed companies can only pay brokerage of 5% on private placement of capital. However, the expenses incurred by the broker for getting hold of subscribers would be borne by the share broker himself. Brokerage can only be paid for the services rendered under a contract with the company.
Stock BrokerStock Broker is one who deals in stocks of monied corporations and other securities. He for a commission attends to the purchase and sale of stocks or shares, of the Government or other securities, on behalf of and for the accounts of their clients. He is a person who has either made an application for registration or is registered as a stock broker or sub broker, in accordance with the rules and regulations made under the SEBI Act, 1992. His functions are broader than the ordinary brokers, since he is entrusted with the possession of the property for which he acts and may even take and transfer it without the name of his principal appearing in the transactions. In India, there is no regulatory body for brokers.
In secondary market, brokers and sub brokers play a vital role. SEBI, as a regulator of the capital market has recognized their role and has thus permitted them to act as underwriters, without getting registered with SEBI pursuant to SEBI (Underwriters) Rules & Regulations, 1993. But this is subject to the condition that they hold a valid registration certificate from SEBI under SEBI (Stock Brokers and Sub Brokers) Rules & Regulations, 1992. However, he has to comply with all the obligations stipulated thereunder. He is also required to obtain the permission of the concerned Stock Exchange of which he is a member, so as to act as an underwriter for each and every issue.
Brokers send out regulatory newsletters to their clients giving them details of primary and secondary markets, particularly of new issues with their recommendation. Some of them undertake Portfolio Management for their valued clients. The brokers and sub brokers are even registered with leading merchant bankers, who handle large number of public issues.
A stock broker invests in the stock market for individuals or corporations. Only members of the stock exchange can conduct transactions, so whenever individuals or corporations want to buy or sell stocks they must go through a brokerage house. Stock brokers often advise and counsel their clients on appropriate investments. Brokers explain the workings of the stock exchange to their clients and gather information from them about their needs and financial ability, and then determine the best investments for them. The broker then sends the order out to the floor of the securities exchange by computer or by phone. When the transaction has been made, the broker supplies the client with the price. The buyer pays for the stock and the broker transfers the title of the stock to the client and performs clearing and settlement procedures.
The Central Government in India has enacted the law relating to Stock brokers under the Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) Rules, 1992 and the Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) Regulations, 1992. The SEBI Rules define ‘Stock Broker’ as a member of the stock exchange. A stock broker acts as an agent of his client and deals with securities on behalf of his client. Though strictly, a stock broker is an agent, yet for the performance of the contract on his part both in the market and with the client, he is deemed as a principal. He holds a peculiar position of dual responsibility. He can charge commission from his client. He not only executes transactions on behalf of investors but also offers value management or services such as initial public offerings on line, asset allocation, portfolio management, financial planning, tax planning, insurance services. In the case of Rajendra Prasad Bagaria v. Bhubaneshwar Stock Exchange Association Ltd. Orissa High Court held that stock broker is governed by SEBI in matters relating to their registration, functioning and have to abide by the SEBI Regulations as well as bye-laws of the respective stock exchanges.
A person who is willing to operate as a stock broker can make an application for it under the SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992. The stock broker has to get himself registered under the SEBI Act, 1992. He has to act as per the conditions of the certificate of registration obtained from the SEBI in accordance with regulations framed under the SEBI Act, 1992, otherwise he cannot deal with securities market and cannot even buy, sell or deal in securities. But he should be eligible as a member of the stock exchange, i.e., he should be a fit and proper person. This is based on an objective test, i.e., whether or not the person has been involved or has a pending enquiry against him for some malpractice in the stock exchange in any segment of the market. Persons who operate in the securities market are required to maintain high standards of integrity, promptitude and fairness in the conduct of the business dealings. People who indulge in manipulative, fraudulent and deceptive transactions or abet the carrying out of such transactions, which are fraudulent and unreliable, are not considered fit or proper persons to operate in the market.
There are certain conditions provided under Rule 4 of SEBI (Stock Brokers and Sub-Brokers) Rules, 1992, which are to be fulfilled before the grant of a certificate to a stock broker. The SEBI Act, 1992 prohibits stock broker from buying, selling and dealing in securities unless he holds a certificate granted by the Board under the SEBI (Stock Brokers and Sub-Brokers) Rules and Regulations, 1992. Existing brokers of the concerned stock exchanges were allowed to continue their business, if they made an application for such registration within a period of 3 months from the establishment of the Board, till the disposal of the application. An interesting aspect of the relationship between a brokers and stock exchange is that the stock brokers are required to pay registration fees for the grant of certificate as prescribed by Schedule III. But if they fail to pay, then the Board may suspend the registration certificate, which implies that the stock broker shall cease to buy, sell or deal in securities as a stock broker.
In National Stock Exchange Members’ Association v. UOI, the petitioner, which was an association of the trading members of the National Stock Exchange, dealt with the sale and purchase of the shares and securities in India. Upon payment of fee, the members were registered under SEBI (Stock Brokers and Sub Brokers) Regulations, 1992. A circular was issued by SEBI by way of clarification requiring separate registration fee to be paid for multiple registration with the SEBI.
Then a writ petition was filed by the petitioners where they contended that the methodology adopted by SEBI for charging multiple registration fees was contrary to Schedule III to the SEBI (Stock Brokers and Sub Brokers) Regulations, 1992. The Delhi High Court held that there was no concept of quid pro quo in view of the nature of regulatory functions performed and the mode and manner of levy of fee to be adopted by the SEBI. Once the power of SEBI was accepted, there could not be a challenge to the methodology adopted for quantification of the fee. The circular was intra vires the regulation and clarified the mode and manner of the calculation of the fee.
In BSE Brokers Forum v. SEBI, the validity of Regulation 10 read with Schedule III of the SEBI (Stock Brokers and Sub-Brokers) Regulation, 1992 was held intra vires the SEBI Act, 1992. But the imposition was held to be a fee and not a tax and was held not to be a condition precedent for the levy to constitute fee.
In due course, a number of brokers, proprietor firms and partnership firms have converted themselves into corporates. Out of 9,519 brokers registered with SEBI at the end of March, 2003, 3, 835 brokers accounting for nearly 40% of the total were corporate entities. At the end of March, 2003, there were 13,291 sub brokers registered with SEBI.
A stock broker is required to pay to SEBI a registration fee of Rs.5,000 for every financial year, if his annual turnover exceeds Rs.1 crore. If this is so, he has to pay Rs.5,000 plus one-hundredth of 1% of the turnover in excess of Rs.1 crore. after the expiry of 5 years from the date of initial registration as a broker, he has to pay Rs.5,000 for a block of 5 financial years. The a trading member can levy a maximum brokerage in respect of securities transactions is 2.5% of the contract price, exclusive of statutory levies like SEBI fee, service tax and stamp duty. Brokerage charges can be as low as 0.15% and maximum brokerage is inclusive of brokerage charged by the sub broker which shall not exceed 1.5% of the contract price.
The brokers of the various stock exchanges filed writ petitions in various High Courts challenging the imposition of fees on turnover to be paid by the brokers under the Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) Regulations, 1990, which were subsequently transferred to the Supreme Court. The petitions were filed on the ground that it is a tax on the guise of the fee and is excessive or arbitrary. One of the case filed was of SEBI v. BSE Brokers Forum in which the validity of the Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) Regulation, 1992 was challenged. Supreme Court directed SEBI to amend the regulations following the recommendations of R. S. Bhatt Committee, which had given recommendations in respect of the computation of turnover of brokers under the regulations.
There are certain duties and responsibilities casted upon the stock broker who should maintain the books of accounts, records and documents. Every stock broker has a duty to intimate to SEBI, the place where the books of accounts, records and documents are maintained. Stock broker after the close of each accounting period, shall furnish to SEBI a copy of the audited balance sheet and profit and loss account as soon as possible but not later than 6 months from the close of said period. If it is not possible for the stock broker to furnish the documents required under Regulation 17 (1) of SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992 within the required time, than he shall inform SEBI of the same along with reasons for delay and the time period by which such documents would be furnished. Stock broker has the responsibility of maintaining the books of accounts and other records for a minimum period of 5 years. There is an obligation casted upon the stock broker to allow the inspecting authority to have reasonable access to the premises occupied by the stock broker or any other person on his behalf. He shall extend reasonable facility for examining any books, records, documents and computer data which are in his possession. He shall provide copies of documents or other materials relevant to the inspecting authority.
A stock broker should follow code of conduct prescribed under SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992. As per code of conduct, he should maintain high standard of integrity. He should exercise due skill and care and should not indulge in manipulation or malpractices. He should execute the orders from his clients’ at best possible price. The member brokers of the stock exchange should issue contract notes to their clients for the securities sold and purchased by them on behalf of the clients. The contract note should state that the rate of brokerage charged is not exceeding the official scale of the brokerage fixed by the stock exchange. He should maintain confidentially in respect of information about his client’s transactions. He should not give advice to his clients unless he reasonably believes that the recommendation is suitable to his client.
A stock broker should not deal with any outside party which has failed to honour its business obligations with any other stock broker of any other stock exchange. So, the names of the defaulting clients should be reported by the member of the stock exchange authorities.
When the stock broker deals with his clients, he should observe certain precautions to avoid problems for the market as well as investors. This would protect the interests of the stock brokers, instill transparency and discipline in the dealings between the brokers and the clients and would contribute in the healthy working of the secondary capital market. These precautions are listed into two categories: (a) mandatory and (b) precautions by way of a guideline. SEBI is of the view that member brokers should strictly follow the mandatory precautions and the precautions by way of guidelines should be followed when circumstances demand. Complaints can also be reported against the stock brokers by the stock exchanges. The concerned stock exchange shall send a Monthly Status Report of Complaints against brokers, instead of sending replies on a case to case basis. Stock brokers sometimes trade on their own behalf as a principal. In such cases, the term broker makes little sense and the individuals or firms trading in a principal capacity sometimes call themselves dealers, stock traders or simply traders.
Sub-BrokerSub Broker is any person, not being a member of a stock exchange. He acts on behalf of a stock broker as an agent or otherwise for assisting the investors in buying, selling or dealing in securities through such stock brokers. He is further an agent of the broker and carries out actual transactions for the broker. He is one who has either made an application for registration or is registered as a sub broker under SEBI Act, 1992.
The members of the stock exchange who execute transactions of their clients through the members of other stock exchanges are treated as Sub Brokers. Any person who not being a member of a stock exchange, acts on behalf of a stock broker as an agent for assisting the investors in buying, selling or dealing in securities through such stock brokers is called as a sub broker. He is associated with securities market and should not buy, sell or deal in securities unless he has complied with the conditions of the certificate of registration obtained from SEBI issued in accordance with Rules and Regulations. If he is associated with securities market before the establishment of the SEBI, then he may continue to do business but upon an application made for registration within a period of 3 months from the establishment of SEBI, till the disposal of such application.
There are certain conditions provided in Rule 5 of SEBI (Stock Brokers and Sub-Brokers) Rules, 1992, which are to be fulfilled before the grant of a certificate to a sub-broker. If the stock broker/sub broker fails to comply with the conditions subject to which he is been granted registration, then he would be penalized and his registration would be suspended or cancelled.
A sub broker should co-operate with his broker in the transactions. He should not knowingly and willfully deliver documents which constitute bad delivery. He should also co-operate with other contracting party for prompt replacement of the documents which are declared as bad delivery. Further, he should extend his full co-operation to his stock broker in protecting the interests of his clients regarding their rights to dividends, bonus rights, rights shares and any other right relatable to such securities.
Further, sub brokers, who act on behalf of their principal broker, are required to issue to their clients purchase or sale notes for all the transactions entered into by them on behalf of their clients. While performing this function, the sub brokers act as an agent of the principal broker.
He is also required to be registered with the concerned stock exchange. The business of the stock brokers and sub brokers is too much interlinked, so, for properly monitoring their activities separate registration procedure is provided. The sub broker owes obligations not only to the client but also to the stock broker. The sub broker enters into a tripartite agreement with the main broker and his client. He assists his clients in obtaining the contract note from the main broker. But he cannot issue the note or make payments through cheques directly, as that has to be done by the main broker.
Relation Between Stock Broker And The ClientThe relationship between a stock broker and a client is that of a principal and agent. SEBI requires that the agreement between the stock broker and an investor is to be in writing. It has to be executed on a stamp paper of Rs. 20. Due to the nature of trading activity at NSE and BSE, every stock broker can be considered as a del credere agent. There also exists a bailor-bailee relationship between the two. There relation is also held to be of fiduciary nature. Still the broker is bound to exercise his functions with due diligence as stated in SEBI Code of Conduct for Brokers. In Sharedeal Financial Consultants (P) Ltd. v. SEBI it was held that ‘due diligence’ required is not that of an ordinary or prudent person but that of a stock broker who would be required to perform his duties towards his client using his skill and reasonable care.
The investor has to deliver the shares to the stock broker so that he can sell them in the stock exchange. In case stock broker cannot sell them, then those shares have to be delivered back to the investor. Thus, a stock broker becomes a bailee and operates on certain responsibilities in that capacity. The relation between the stock broker and the investor is that of fiduciary nature, which is founded on trust, reliance, dependence or confidence rested by the investor in the reliability and faithfulness of the stock broker who is in a position of relative dominance and influence. In Kennedy v. Budd it was held by the court that when we consider the broker’s duties as to the performance of the contract after the purchase has been made, he was bound to act solely for the benefit of his customer and bound to give his best judgment and to take no advantage of his customer, it was quite clear that to that extent he acts in a fiduciary capacity. Even in State ex rel. Paine Webber, Inc. v. Voorhees the Judge observed that the broker had an implicit obligation which arose in connection with his fiduciary duty to the customer, which was to disclose to the customer the material facts. This duty does not, however, include the obligation to discuss prominent written provisions with the competent party. When broker is disloyal and betrays the trust and confidence of his client/investor, than he could be held liable for damages. If a broker misrepresents or fails to provide information regarding an investment or transaction, the client/investor may have a potential claim against that broker to recover losses.
When a client operates through a stock exchange, he has the right to receive the best price prevailing at that time for the trade, the money or shares on time, contract note from broker confirming the trade and indicating the necessary details of the trade, good delivery and right to insist on rectification of bad delivery.
The broker has a number of rights that he can claim over his clients. A broker who has carried out his instructions is entitled to full indemnity from his client against any losses or liability incurred by him for having entered into the transaction. He shall be at full liberty to close out the contract when the client fails to make payment to him within 2 days of issuance of contract note and sell or purchase the securities.
SEBI has issued mandatory guidelines to be followed by the stock brokers before they agree to act on behalf of their clients. An important duty of the stock broker towards his client is that of confidentiality. Under SEBI guidelines, the broker is not supposed to disclose either personal or financial details of his clients to anyone. The broker has a corresponding duty to ensure that he maintains separate accounts for his clients and pays them regularly the required amounts. The clients are also issued ID’s in case they need to be traced if they fail to make payments.
To conclude, it is submitted that SEBI has modernized the stock exchanges. An active effort made by stock exchanges is that of making the clients aware of their rights and liabilities. Even today, the stock broker continues to command an immense power in the stock exchanges. A vast majority of securities transactions are handled by stock brokers or dealers who act as agents for principal willing to buy or sell securities. But technological developments in 21st century have greatly influenced the nature of trading. The increased access to internet and the proliferation of electronic communications networks altered the investment world. Through e-trading, the customer enters an order directly on-line and software automatically matches orders to achieve the best price available without the intervention of specialists or market makers or stock brokers. This has gradually reduced the need of intermediaries like stock brokers to deal between the client and the stock exchange.
 Aiyar, P. Ramanatha, Concise Law Dictionary, 3rd ed. 2005.
 Securities Exchange Act, 1934 (US Act), Section 3 (a) (4).
 AIR 1946 Mad. 42 at 44.
 Metropolitan Coal Consumer’s Association v. Scrimgeour, (1895) 2 QB 604 (CA).
 Companies Act, 1956, Section 165 (3) (h).
 Bhandari, M.C., Guide to Company Law Procedures, 9th ed. 2005 (rep. 2006), Vol.2, p.365.
 (1888) 40 ChD 141.
 Pennington, Robert R., Company Law, 8th ed. 2001, pp. 382-383.
 Aiyar, P. Ramanatha’s, The Law Lexicon, 2nd ed. 1997.
 Finance Act, 1994; substituted by Section 90, Finance Act, 2004, Section 65 (101).
 SEBI (Stock Brokers and Sub-Brokers) Rules, 1992, Rule 2 (e).
 The Companies Act, 1956; Section 76.
 (1999) 97 Comp Cas 182 (Ori).
 SEBI Act, 1992, S.12 (1).
 SEBI (Criterion for Fit and Proper Persons) Regulations, 2004.
 SEBI (Stock Brokers and Sub-Brokers) Rules, 1992, Rule 4: Conditions for grant of Certificate to Stock-Broker:
The Board may grant certificate to a stock broker subject to the following conditions namely: -
a) He holds the membership of any stock exchange;
b) He shall abide by the rules, regulations and bye-laws of the stock exchange or stock exchanges of which he is a member;
c) In case of any change in the status and constitution, the stock broker shall obtain prior permission of the Board to continue to buy, sell or deal in securities in any stock exchange;
d) He shall pay the amount of fees for registration in the manner provided in the regulations; and
e) He shall take adequate steps for redressal of grievances of the investors within one month of the date of the receipt of the complaint and keep the Board informed about the number, nature and other particulars of the complainants received from such investors.
 Same provisions are drafted under SEBI (Stock Brokers and Sub-Brokers) Rules, 1992.
 Same provision prescribed under Rule 3 of the SEBI (Stock Brokers and Sub-Brokers) Rules, 1992.
 SEBI (Stock Brokers and Sub-Brokers) Regulation, 1992, Regulation 10 (1).
 Ibid., Regulation 10 (2).
 (2006) 130 Comp Cas 468 (Delhi).
 (2001) 104 Comp Cas 506.
 Sahoo, M. S., An Overview of the Securities Market in India, Chartered Secretary, Vol. No. XXXIV, April 2004, (A-100), pp. 487-488.
 Supra n.25 at 489.
 (2001) 3 SCC 482.
 SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992, Regulation 17, provides for list of books, accounts, records and documents to be maintained by the stock broker. They are:
a) Register of transactions;
b) Clients Ledger;
c) General Ledger;
e) Cash book;
f) Bank pass book;
g) Documents register should include particulars of shares and securities received and delivered;
h) Member’s contact books showing details of all contracts entered into by him with other members of the same exchange or counterfoils or duplicates of memos of confirmation issued to such other members;
i) Counterfoils or duplicates of contract notes issued to clients;
j) Written consent of clients in respect of contracts entered into as principals;
k) Margin deposit book;
l) Registers of accounts of sub-brokers;
m) An agreement with a sub-broker specifying the scope of authority, and responsibilities of the stock-broker and such sub-broker.
 Ibid, Regulation 17 (2).
 Ibid, Regulation 17 (3).
 Ibid, Regulation 18.
 Ibid, Regulation 7.
 Datey, V.S., Taxmann’s Corporate Laws & Secretarial Practice, 9th ed. 2007.
 Sekhar, K., Guide to SEBI Capital Issues Debentures & Listing, 3rd ed. 2003, Vol. 2, p. 1793.
 Ibid. at 1796
 SEBI (Stock Brokers and Sub-Brokers) Rules, 1992, Rule 2 (f).
 Finance Act, 1994, Section 65 (1) (88).
 SEBI Act, 1992, S. 12 (1).
 Ibid, S. 12 (1) proviso.
 SEBI (Stock Brokers and Sub-Brokers), Rules, 1992; Rule 5: Conditions of grant of Certificate to Sub-Broker:
The Board may grant certificate to a sub broker subject to the following conditions namely: -
a) He shall pay the fees in the manner provided in the regulations;
b) He shall take adequate steps for redressal of grievances of the investors within one month of the date of the receipt of the complaint and keep the Board informed about the number, nature and other particulars of the complainants received; and
c) In case of any change in the status and constitution, the stock broker shall obtain prior permission of the Board to continue to buy, sell or deal in securities in any stock exchange;
d) He is authorized in writing by a stock broker being a member of a stock exchange for affiliating himself in buying, selling or dealing in securities.
 Iyer, V.L., Taxmann’s: SEBI Practice Manual, 2003, para 9.11, p.609.
 Code of Conduct for sub brokers.
 Code of Conduct issued under Regulation 15 of the SEBI (Stock Brokers and Sub-Brokers) Rules and Regulations, 1992.
 Iyer, V.L., Taxmann’s: SEBI Practice Manual, 2001, para 9.5 A, p.599
 The SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992, as amended on 23rd September, 2003.
 Doughlas, W.O. & Bates, W.E., Stock Brokers as Dealers and Agents, 43 Yale LJ 46 (1933).
 A del credere agent is one who in consideration of commission, guarantees his principal that the third persons with whom he enters into contracts on behalf of the principal shall perform their financial obligations, i.e., if the buyer does not pay, he will pay. All the brokers of the NSE and BSE are del credere agents in the sense that if the buyer defaults from paying for the shares, then the broker will pay the stock exchange on behalf of his principal and in the case seller does not deliver the shares sold by him, then he will buy the shares in the open market at the running rate and deliver it to the exchange.
 As per Section 148 of the Indian Contract Act, 1872, a bailment is the delivery of goods by one person to another for some purpose, upon a contract that they shall, when the purpose is accomplished, be returned or otherwise disposed of according to the directions of the person delivering them. The investor has to deliver the shares to the stock broker so that he can sell them to the stock exchange. In case stock exchange cannot sell them, the shares have to be delivered back to the investor.
 SEBI (Stock Brokers and Sub-Brokers) Rules and Regulations, 1992, Regulation 7 (A) (2), Schedule II.
 (2003) 4 Comp LJ 148 (SAT).
 Nithyananda, K. V., Relationship Between an Investor and a Stock Broker as expressed in Client – Broker Agreement, (2004) 54 SCL 22.
 5 A.D. 140, 39 NYS 81 (1st Dep’t 1896).
 891 S.W. 2d 126 (Mo. 1995).
 SMDRP/POLICY/Cir-2001, dated 18.7.2001 (2004) 10 Comp LJ 82 (St.)
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