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Monday, December 23, 2019

How to become a stock broker?

What is the Stock Market?


The stock market refers to the collection of markets and exchanges wherever regular activities of buying, selling, and issuance of shares of publicly-held companies take place. Such financial activities are conducted through institutionalized formal exchanges or over-the-counter (OTC) marketplaces that operate underneath a defined set of laws. There will be multiple stock trading venues in a country or a region which permit transactions in stocks and different forms of securities.



 How to become a stockbroker? - rictasblog.com


The truth is that the activity of stockbrokers is regulated in Chile through Law 18.045 of the stock market and the various regulations that the Commission for the Financial Market has on the subject.


Between fiction and reality, Bud Fox, Jordan Belfort and Chris Gardner share something in common. Each of these cinematographic figures relentlessly sought, and for different reasons, to succeed as a Stockbroker.


Stockbrokers are the intermediaries of the market, with its main function being securities brokerage. They are the only institutions that are legally entitled to trade securities. To invest in the market, investors must go to one of the brokers associated with the Exchange.



How to become a stockbroker? Legal aspects



Law No. 18.045 indicates that there are two agents linked to the world of securities brokerage, the first is called Stock Broker, and the second is called Stock Broker, the difference from the first with the second, is that the stockbroker acts inside a stock exchange, and those that operate outside a stock exchange, are called agents.

In this regard, it is important to mention that in Chile there are two exchanges: the Santiago Stock Exchange and the Electronic Stock Exchange.


Considering what is established in Law 18.045, it will be understood that any intermediary that works within these exchanges will be a stock broker. To be registered as a broker or securities agent, the following requirements must be met:


● Be of legal age according to Chilean law (18 years).

● Have full secondary education or its equivalent, and accredit knowledge of intermediation of             values. In the case of a securities agent, this accreditation of knowledge will be made from time to time at the discretion of the Commission for the Financial Market. In the case of stockbrokers, the accreditation of knowledge will also be done from time to time, only that it will be in charge of the respective stock market.
● Have an office installed to function as a securities intermediary.
● Keep a minimum of 6,000 U.F. However, to be able to intermediate autonomously, a patrimony of 14,000 U.F.
● Not having been canceled the registration as intermediary of securities.
● Not having a criminal record related to crimes related to fraud to assets and / or public faith.
● Not being in liquidation process.
● Acquire a stock of the Stock Exchange
● To constitute a guarantee that will be of an initial amount equivalent to 4,000 UF and any other requirement that the Commission determines by means of general norms.
● Stockbrokers must meet and maintain the margins of indebtedness, placements and other liquidity and equity solvency conditions established by the Commission.

In the event that a legal entity wants to be a securities broker, it must include in its name the expression stockbrokers or securities agents depending on the circumstance, once the registration application is made, the Commission will have a period of 30 days to give an answer. Being able to suspend depending on the context.


Banks and financial companies are not required to register in the Registry of Brokers and Securities Agents to perform intermediation functions, in accordance with the powers granted by the General Banking Law. However, they are subject to all other provisions of Law No. 18,045 of the Stock Market, in relation to their activities as such.



Requirements to be a member of a bag:



● Comply with legal requirements,

● Comply with the requirements imposed by the respective stock exchange center,
● Have the approval of that institution, in order to be a broker of that bag.

Both the stock exchanges and the securities intermediaries, make a charge for the negotiations that they carry out (purchase or sale). The amount to be paid includes: broker commission, stock rights, value added tax (VAT), maintenance or custody cost and other costs.


Once the person or entity complies with the legal requirements - to review in detail the legal requirements click on the following link of the CMF- and manages to be a stockbroker, its main functions are those described in the following note What is what the stockbrokers do?




How to become a stockbroker? Formative Aspects



Although it is not a sine qua non condition, training from the Faculty for the business world can be a good approach. Here is a list of careers that allow you to know the world of business and finance:

● Commercial engineering

● Economy
● Industrial Civil Engineering
● Right
● Execution Engineering
● Accounting and auditing
● Finance Engineering
● Administration and Finance Technician
● Financial Technician
● Engineering and / or Bachelor of Mathematics.


And of course there are post-graduate specializations. There is also the accreditation required by General Standard 412 on Accreditation of Knowledge in the Stock Market. This test is aimed at:


● Directors, Administrators and General Manager.

● Commercial Manager, Area Managers in charge of management, management, supervision of processes or customer service and the creation and marketing of service products.
● Managers and Chiefs in charge of the direction, management and supervision of Back Office processes.
● Managers, Area Managers in charge of the analysis of relevant studies for investment decision making.
● In charge of the execution of the financial operations of the Bank of third parties, portfolio or       portfolio manager or selection of investment alternatives.
● Advisors or Executives Direct contact with clients, whether for contracting, marketing or offering services and products, as well as to give investment recommendations.






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