What Is a Securities Broker?

A securities broker refers to a securities dealer that accepts client orders to buy and sell securities on a stock exchange, acts as an intermediary for both parties to the transaction, and receives commissions. It can be divided into three categories: commission brokers, two-dollar brokers, and bond brokers. Practitioners can only engage in securities brokerage business after they have obtained the qualifications through the securities qualification examination. ^[1]

Securities brokers

1. Duties of a stockbroker

The role of a stockbroker is to

Domestic use of electronic trading systems, customers do not need securities brokers, can place orders to buy and sell securities by themselves, subject to domestic laws, domestic securities brokers cannot manage wealth on behalf of customers. Domestic securities brokers, the basic daily work is

1.For investors

The China Securities Regulatory Commission issued the "Interim Provisions on the Management of Securities Brokers" on March 16, 2009, regulating the qualifications and practices of securities company brokers, and the management responsibilities of securities companies. The regulations will be officially implemented from April 13.

According to regulations, a securities broker shall register with a securities company in China Securities Industry Association for practice registration, and after obtaining a securities brokerage certificate issued by a securities company, it shall exclusively act for the securities company to engage in client solicitation and customer service activities.

According to the authorization of the securities company, the securities broker can introduce the basic situation of the securities company and the securities market, the basic knowledge of securities investment and related business processes, the laws and regulations related to securities trading to the client, and pass on the research provided by the securities company to the client. Reports and information related to securities investment, pass on to customers the publicity and promotion materials of securities financial products and related information provided by securities companies.

This provision also makes clear requirements for the prohibited behavior of securities brokers, including: handling account opening, cancellation, transfer, securities subscription, trading or fund access, transfer, inquiry and other matters for clients; provision and dissemination False or misleading customer information to induce customers to buy and sell securities unnecessarily; soliciting customers by improper means such as demeaning competitors or entering competitors 'business sites to persuade customers; leaking customers' business secrets or personal privacy; Provide intermediaries, guarantees or other facilities for financing.

According to regulations, a securities broker can only accept the commission of a securities company, and its scope of practice should be compatible with the management capabilities of the securities company it serves, the customer management level of the securities business department, and the reasonable area of customer service.

According to reports, in recent years, with the continuous development of the securities market and the intensification of competition in the securities industry, some securities companies are actively exploring the development of a team of securities brokers. This has played a positive role in promoting the development of the securities market. However, due to inadequate management of some securities companies and the overall quality of securities brokers to be improved, there have also been a small number of securities brokers in order to compete with customers for disorderly competition. Frequent transactions by customers, such as disrupting market order and damaging investors' legitimate rights and interests. In response to these problems, the supervisory authorities have taken measures to urge securities companies to regulate them and introduced the above-mentioned provisional management regulations. ^[2]

Announcement on the Collection of Personal Income Tax on Commission Income from Securities Brokers (Announcement of the State Administration of Taxation)

45 of 2012

The issue of levying personal income tax on commission income of securities brokers is hereby announced as follows:
1. According to the "Personal Income Tax Law of the People's Republic of China" and its implementing regulations, the commission income received by a securities broker from a securities company shall be subject to individual income tax in accordance with the "remuneration for labor services" item.
2. The commission income of securities brokers consists of the cost of exhibition business and labor compensation. No personal income tax is levied on the cost of exhibition business. According to the current actual situation, the proportion of the cost of exhibitors' business development is tentatively set at 40% of the amount of each income.
3. The brokerage agent uses the commission income obtained within one month as one income. Each income is deducted from the actual business tax and surcharges paid, and then deducted the cost of business development stipulated in Article 2 of this announcement. The balance is based on the personal income tax law. Calculate and pay personal income tax.
4. A securities company is a withholding agent of the individual income tax for securities brokers, and shall be in accordance with the "Notice of the State Administration of Taxation on Printing and Distributing the" Interim Measures for the Administration of the Withholding and Declaration of Full Individual Income Tax Members "(Guo Shui Fa [2005] No. 205) It is required to conscientiously do a good job of withholding income tax reports for all employees.
V. This announcement will be implemented from October 1, 2012.
Special announcement.
State Administration of Taxation September 12, 2012

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