Does anyone know the process of starting a online stock trading company brokerage?

Question

like scottrade/trade king/e trade/ zecco

Answer 1

set up a account with any broker, some brokers require a min. of $500 some do not, shop around. many brokers out there scottrade, Ameritrade, tradeking, brookstone securities and so on, check the pricing and trade to placetrade times, I deal with Scottrade because they execute the trade the fastest any delay in a trade can cost you money, I have seen some trades jump 3 to 5 % because of a delay in trade and that is important

Answer 2

Here's a partial list of what you will need.  It takes at least 90 days to have an entity approved by all the necessary regulators, and another 45 days to have all agreements and licenses in place along with all the necessary equipement.

You must be a corporation or a registered partnership.

You will have to sufficient capital to meet the rules and regulations of the various governing agencies.   You will need net capital of at least $250,000 which means you will need capital in excess of $300,000

In addition to the base capital, you will need to pay for insurance coverage, not only of the physical facilities but also for broker insurance of the business.

You will have to apply for registration with the SEC, submitting certified balance sheet, detail listing and personal information of all the principals of the firm, detailed business plan on the type of business that you will be doing and how you are going to clear transactions.. If you are going to clear fully disclosed you will need a letter of intent from the clearing firm.  If you are going to self clear you will need detail listing of the equipment and system that will be used. Along with the staff you plan on using.

After approval from the SEC you must apply for membership in FNRA, submitting copies of your SEC filings including all supporting evidence, provide current certified audited financials, submit copies of your firm''s supervisory procedures.

Once approved by the SEC and p[ending memebership in FNRA you will need registration with your state and local municipalities.

Once approved, you will need to provide disastery recover procedures for all your data processing and storeage equipment.  

You will need, high speed data lines, with back-up lines and equipment.  

You will need contracts and/or agreements in place with vendors for property, phone and office equipment.

You will have to be registered with FNRA, and must have all the appropriate licenses.  You will need a staff of support people,  if any will deal with the general public, they will have to be registered and have the appropriate licenses.

Unless you have industry experience, it will be a very tough road for you and unless you have professional assistance, you probably will not make.   Believe me, it's not that easy, I have established many firms as broker/dealers both in this country (US) and others.