My Investment Markets
The company will trade in securities as principle with the
intention of reselling these to the public and will also act as an
intermediary in the execution of securities transactions on behalf
of/for its clients.
The company will adopt the following approaches:
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a) When the company acts as a broker, it connects person A with
Bid order to person B with Ask order. In this case company takes
the commission for connecting them
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b) In case of principal, the company acts as a dealer, where it
has ownership of the security and if the customer is happy with
the terms and the price, the company will sell the security to
the customer without searching for the liquidity on the market
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c) In the case of acting as an intermediary, the company will
take orders from the clients and will execute the same at the
current market price, or limit order where a minimum or maximum
order price is needed to have the order executed. Once the order
is placed, the client receives a notification in terminal that
order is placed
CHURNING
Churning is the practice of executing trades for a customer’s
investment account by a broker or brokerage firm for the sole
purpose of generating commissions. It occurs when a broker engages
in excessive buying and selling in the clients’ account that is
unnecessary to fulfil the investment goal of the client.