A Handbook For Institutional Broking In India

By Author: sammy Cook
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The term Institutional Broking generally refers to a provision that allows the stock broking services a provision to fund financial institutions and the fund managers. With this particular type of broking clients are generally provided access to ‘sell side research’ along with a number of other broking services and the level of access normally depends on the amount of business that they can actually give to the broker or the broking organization.
The Institutional Broking services in India are known to provide their clients with a range of broking services like
• Access right to published researches
• A chance to participate in investor conferences
• Regular updates from institutional brokers along with
• Soft commission, straight through processing advantage and many others.
In stock broking institutional clients are considered to be in a position that is significantly stronger than the private clients because they not only offer more business to the broking services but they are also much less dependent on the brokers. Most institutional clients actually use more than ...
... one broker competing for their business and are naturally expected to have a better return on their investment.
On the other hand in Derivative Broking investment professionals guide individual as well as institutional clients in derivative trading and most of the times the advisors are part of a derivative investment team of a brokerage firm. Derivative broking involves a range of activities on the part of the brokers like negotiating derivative swap deals, conducting research on international investment provisions, analyzing corporate portfolios and a few others but the most important part of their responsibility is to provide his clients with investment options and also to help in proceeding with and executing his trade.
Derivatives are often referred as alternative investments and compared to the traditional stocks and bonds require a significantly different approach. Stocks and bonds refer to real ownership on the part of the investors but derivatives actually signify future growth possibilities and are also referred as ‘Futures’ or ‘options’ by the professionals.
In India it is possible to invest in different types of derivatives and the primary job of a derivative broker is to design a suitable investment plan to invest profitably in equity derivatives, credit derivatives or insurance derivatives and also to provide his clients with useful derivative investment tips. Understanding the risks associated with any derivative investment or a portfolio management is also a major responsibility of derivative brokers and he is also required to formulate a viable investment strategy depending upon the financial goals of his clients.
A number of renowned brokerage firms are now offering portfolio management services exclusive for their international clients and are also setting up institutional desks in the major cities of the country for the future of Institutional Broking in India seems pretty bright. Keeping pace with the developing trend more executives are being hired by the broking organizations and some of them are also going in collaboration or getting merged with internal clients to have access of an international network. A handful of big foreign brokerages have also entered the domestic retail market and institutional and derivative broking in India is really expecting an all time high.