Stockbrokers act as agents for those wishing to buy and sell shares in publicly listed companies on the stock exchange. A stockbroking firm is said to be a "member" of the stock exchange, and it is only these members that are permitted to buy and sell shares on behalf of others. Membership of the stock exchange entails compliance with various, quite stringent, rules and regulations and the payment of hefty fees. Individuals employed as stockbrokers in the stockbroking firms are also required to comply with various rules and regulations.

It is interesting to note that one can actually buy shares in the Australian Stock Exchange. The exchange itself is a publicly listed company; its "ticker" code is ASX, naturally. A ticker code is a three letter code by which a publicly traded company is known. BHP-Billiton, for instance has the ticker code BHP; Telstra is TLS, and so on. Settlement of trades

The process of deciding to buy or sell a share, and the steps required to do so explained above, are only the first link in a chain of events required to transfer ownership of a share.

After a trader speaks to a stockbroker to conduct the transaction involved in buying some shares, the process starts for the actual transfer of ownership of the shares, and the payment of money in exchange for ownership of these shares. The settlement process was once a fairly simple operation of exchanging cheques for certificates of ownership between stockbroking firms. Fairly simple, that is, unless a cheque or certificate was misplaced (or the settlement procedure somehow disrupted in some other way), or the volume of transactions became too large for a physical exchange system to cope. It was the explosive growth in the volume of share transactions that led to a more streamlined system of ownership transfer being developed.

The physical exchange of paper has now been replaced by an electronic register of ownership, the CHESS system (Clearing House Electronic Subregister System). Ownership of shares is now electronically transferred immediately upon the deal being transacted. Payment for the shares purchased is conducted on a "T+3" basis; that is a broker must pay for the purchase of shares no later than three days after the deal being transacted. In practice this translates to the need for the client to have payment made to the broker within three days of the transaction. While a cheque, money order or cash is acceptable for settlement, most brokers have arrangements made with a cash management trust run by a major bank whereby clients open an account and have trades settled by direct deposit and withdrawal from this account. Some brokers even use the Bpay system.