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Brokerage Companies

A brokerage company’s main duty is to act as a middle entity connecting buyers and sellers to facilitate a transaction. Brokerage companies typically receive compensation by means of a commission (either a flat fee or a percentage of the amount of the transaction) once the transaction has successfully completed. For example, when a trade orders a stock to be executed, an investor pays a transaction fee for the brokerage company's efforts to complete the trade.

There are 108 brokerage companies active in the Iranian capital market. Their activity license is granted by the SEO. All brokerage firms may obtained the activity license to operate in each of the four Exchanges separately, i.e. Tehran Stock Exchange, Iran Farabourse, Iran Mercantile Exchange and Iran Energy Exchange.

Market-making activities are being done through the brokerage companies. However, based on the recent directives, market-making operations are gradually shifting to independent companies with a new license issued by the SEO. Moreover, brokerage companies welcome e-trading, and the ratio of e-trading is upheaving.


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