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The emergence and rapid development of the stock market have created numerous opportunities in the industry for investors to make money. Owing to these numerous profit-making opportunities, the Indian stock market is witnessing unprecedented demand from the opening of record-breaking Demat accounts.
Technological advancements from Stock exchanges to brokers have enabled certain processes to be completely digitised. The most innovative process is digitising the trading platforms and the included system. For example, a plethora of online discount brokers are essentially apps that enable you to trade in the stock market through them, with little to no human intervention.
However, physical assistance is still required for investors who prefer having an expert to assist them in transactions and for online brokers to find new customers. The role known as authorised partner (previously known as sub-broker) has become pivotal in the spectrum of trading today.
This article will break down the concept of what is a sub broker in share market (now known as authorised partners) alongside an in-depth explanation of how one can become an authorised partner and its various benefits.
You have probably heard of a broker but are unaware of what an authorised partner is in the share market. If you are, here is the sub broker meaning (Also known as an Authorised Partner).
The sub broker definition is a person who functions similarly to a broker but works as the middleman between two parties: the customer and the main broker. While a stock broker is the middleman between an investor and the stock exchange, a sub-broker is the middleman between the stockbroker and the investor.
The job of an authorised partner is to mediate between the broker and client and assist the client in various activities such as financial transactions and paperwork. Since the authorised partner works for a stock broker, in most cases, their job includes bringing clients to the brokerage firm. Additionally, the authorised partner assists clients with investing and dealing with securities. In return for the services rendered by the authorised partners to the brokers, they receive a certain commission from the transaction done by the clients.
Now that you have understood what an authorised partner is, you can move on to understanding the concept in detail.
Sub-brokers (now known as authorised partners) play a pivotal part in equities markets, acting as delegated representatives approved by lead brokers to facilitate trades on their behalf. Here is a breakdown of their principal obligations and roles:
To become an authorised partner, several requirements and steps must be followed. Here’s a concise list of what you need:
The role of a sub broker is the result of an increase in demand for brokers as people generate excess amounts of funds and income that they wish to invest. While being a broker requires extensive permissions and certifications, being a sub broker allows you to carry out similar functions, short of being listed as a trading member of the stock market. You can consider partnering with reputed organizations like IIFL Capital to smooth your process for the same and make use of their existing expertise.
Become a Partner & Earn up
to 1 Lakh* per Month!
An authorised partner is a representative of a stockbroker who helps acquire clients and provide trading services. They earn commissions on client trades, enjoy brand support from top brokers like IIFL Capital Services Limited, and get access to research and advisory tools.
An authorised partner must be SEBI-compliant if dealing in securities, while a franchisee may only sell products like mutual funds or insurance without SEBI registration. A franchisee focuses on distribution, but an authorised partner represents the broker in stock market operations.
Sub-brokers are now known as Authorised Persons under SEBI rules, and their role is largely the same. While they can’t directly handle client funds, they can assist with trading in various market segments under the broker’s supervision.
The minimum qualification is completion of 10+2 education. A background in finance and knowledge of the stock market can be an added advantage.
Authorised partners are appointed by stockbrokers to act on their behalf. They must follow the broker’s rules and the regulations of the exchange.
Become a Partner & Earn up
to 1 Lakh* per Month!