Why you can’t do without a broker and how to check the legitimacy of the company

A broker is a professional intermediary in concluding transactions. He brings together two interested parties, but acts in the interests of one of them. For his work, the specialist receives a monetary reward from the client – a commission.

An exchange broker is, in simple words, the same intermediary, but in the stock market. He buys and sells at the request of the client – the investor. An individual does not have the right to place orders on the exchange: only accredited market participants who have received permission can do this. In addition, the use of financial instruments causes difficulties for non-specialists. Therefore, it is more profitable to contact an experienced trader.

Broker function

The main task is the execution of transactions in the stock market on behalf of investors. The key rule of working as an intermediary is the strict fulfillment of the client’s requirements. Today, through brokers, you can buy and sell the following assets:

  • stock,
  • currency,
  • options,
  • futures,
  • bonds (including bonds of an internal state loan – government bonds).

Broker vs Dealer – What’s the difference?

The dealer also participates in securities trading. But he makes deals on his own behalf and for his own money. And his income is the difference in the rate of buying and selling shares or other assets. The broker conducts intermediary activities. He acts in the interests and at the financial expense of the client, strictly following the instructions. The client pays only for the services of a specialist and does not share profits with him.


On the stock exchange, the interests of the client are often represented not by individual specialists, but by investment companies. The advantage of such cooperation: a network of branches throughout the country, a staff of experts, access to deep analytics (brokerage firms often contact banks and other large financial structures).

Broker functions: here and in the west

In foreign organizations, brokers act only as intermediaries. If an investor needs information support (news, market analysis, recommendations), he must conclude an agreement with an analytical company.

In Ukraine, even the most highly paid specialists, in addition to carrying out financial transactions, provide analytics, develop tactics, and conduct training. They help their customers earn as much as possible. And all this is covered by the commission of the intermediary. Such a scheme of cooperation is beneficial for an investor who does not want or cannot (due to lack of knowledge in trading or time) independently think over strategies. In this case, he turns to his broker, who gives recommendations on investing. That is why a lot depends on the choice of a company in Ukraine, and professionals in their field usually work in large rating holdings.

How to check a broker’s license

The activities of investment organizations are regulated by the state. In order to provide brokerage services, a company must obtain a license, comply with all the conditions of the law and submit reports on work on time. All this is done to protect the end investors. If an investor wants to trade in the stock market, he can apply to a brokerage firm that has official permission and is a member of the desired exchange.

The license is issued by a special state body – the National Commission for Securities and the Stock Market (NKTSBFR). To check the company, just go to the YouControl resource and enter the name of the organization in the search bar. The service provides a complete up-to-date dossier on each enterprise in Ukraine. Additionally, the company must be an accredited member of the stock market. Exchanges regularly check permissions and do not allow traders with an expired license or without one to trade. For example, if a company operates on the Ukrainian Exchange, its name can be found in the list of exchange members.

Note! Some accredited securities market participants are financial institutions that do not provide brokerage services to retail investors. To learn more about the selected company, click on the house icon in the list of members of the exchange – and go to the company’s website.

Other sources of information when choosing an investment intermediary: ratings of the Ukrainian Exchange, a black list of fraudulent brokers.

Is a broker an intermediary or an expert assistant?

The main task of the specialist is to provide the client with access to the stock market. In simple words, a broker is the hands of an investor on the stock exchange. And if we talk about Ukraine, then very often it is also the head. Turning to a Ukrainian company, the client receives a full package of services – from filing an application on the stock market to round-the-clock information support and expert advice on where to invest. A similar range of services when paying only commissions for transactions is the prerogative of domestic investors. Ukrainian firms are more client-oriented than foreign ones. But in order for the advice of a specialist to give real profit, it is worth contacting a company with the necessary permissions and a brilliant reputation.