On the way out? Dealer-led trading in sharp decline, shows data

Dealer-led systems, which accounted for more than 60% of turnover in the equity cash market in FY15, had fallen to about 25.1% by FY26, according to data from NSE

A decade ago, most share trading on stock exchanges in India involved calling a dealer at a preferred brokerage. That is no longer the case. 

Dealer-led systems, which accounted for more than 60 per cent of turnover in the equity cash market in FY15, had fallen to about 25.1 per cent by FY26, according to data from the National Stock Exchange (NSE).

 

There has been a steady year-on-year (Y-o-Y) and month-on-month (M-o-M) decline in the use of dealer-operated systems such as computer-to-computer link (CTCL) and the National Exchange for Automated Trading (NEAT), a screen-based platform, according to the NSE’s Market Pulse publication.

 

“Traditional dealer-led routes weakened further, with the share of CTCL/NEAT terminals declining 124 basis points M-o-M and 473 basis points Y-o-Y to 21.4 per cent... The evolving channel mix points to deeper adoption of automated infrastructure alongside sustained expansion in mobile-based investor participation,” the report said. 

 

The proportion of investors placing orders via phone calls or by visiting brokerage offices is now small and continues to shrink, said Nilesh Sharma, executive director and president at Samco Securities. Most active traders prefer mobile applications that provide real-time alerts, including price targets -- functions that dealers once delivered through client calls.

 

Operating via mobile platforms is also more cost-efficient for brokerages than keeping large dealing teams. Clients opting for call-and-trade services are often charged an additional fee, further reducing the channel’s appeal, Sharma said. “A lot of brokerages now have call-and-trade charges, which act as a deterrent.”

 

A senior executive at a brokerage with traditional roots said that, a decade ago, most clients relied on dealers to execute trades. The intervening years have brought structural change across the broking industry, with technology simplifying client onboarding and enabling direct trading through mobile applications.

 

Traditional brokerages have since closed the technology gap, and earlier asymmetries are no longer evident. All major firms now offer electronic onboarding via mobile platforms. An older cohort of clients still prefers to speak with a dealer before placing orders. This segment typically manages larger portfolios than younger, technology-first investors, helping sustain demand for dealer services.

 

“On the contrary, dealing strength has increased for full-service brokers because the number of clients has risen,” the executive said. While dealer headcount may not have grown in line with the client base, absolute numbers may still be higher than before.

 

The decline in dealer-led turnover in equities does not extend uniformly across all market segments. In some areas, dealer intermediation remains dominant.

 

Despite a Y-o-Y decline from more than 90 per cent in FY25, the CTCL/NEAT route accounted for 80.3 per cent of commodity derivatives turnover in FY26, according to NSE data.