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Learn How To Become A Sub Broker Or Authorized Person With SMIFS – Role, Criteria and Benefits


An individual wanting to invest in the securities market can look up to an authorised person for help. The authorised person (also known as Stock broking sub-broker) is a person who acts as an intermediary between the investor and the broking firm. But, how can one become an sub-broker or authorised person?

A stock broker can appoint more than one AP (or sub-broker), after it earns the specific prior approval from the stock exchange for each person. These people are not registered with the exchange but work under the stock-broking firms to earn extra income.

What is the role of an Authorised Person?

authorised person

According to SEBI Circular MIRSD/Dr-1/Cir-16/09, as of 6th November, 2009; ‘An “Authorised Person” (AP) means any person – Individual, partnership firm, LLP or body corporate – who is appointed as such by a stock broker (including trading member) and who provides access to trading platform of a stock exchange as an agent of the stock broker.’

Relations with stock exchange

The franchise to become an sub-broker or  an authorised person is obtained from a stock broker. Once received, the AP shall play the primary role of maximizing its turn-over. Sometimes, they even provide useful tips to clients to increase the dealings of their area.

Relations with stockbroker

Once a person has become an sub-broker or authorised person, they need to follow a set of functions. These functions include:

1.     Development of business

The primary function of every AP is to increase the business volume. It is for the AP to attract investors who are interested in investing in the securities market.

2.     Maintaining a quality of deals

The deals that are made by the AP should be genuine and should not provide any false documents that are held against the integrity of the securities market.

3.     Maintaining the transparency in deals

All the documents of the dealings that pass through the table of the stock broker, should be closely handled only by the AP so that they are not misplaced. The AP works with dividends, bonus rights and other assets of the client.

4.     Helping stockbrokers in sales

In general, the work of an authorised person is to help clients in transactions and issue sales notes on behalf of the broking house.

Relations with client

relation with client

1.     Facilitating the investment

An AP can help clients about making the investment choices by which they can maximize profits and give proper guidance to investors regarding buying the right security.

2.     Providing suggestions on investments

An investor requires investing tips and market news to invest in the right fund. The work of an AP is to understand the client’s requirements and serve them with the best investment opportunities.

3.     Assisting the investment practices

This is the final step of investment where the AP provides simplified stock broking process and motivates investors to make confident stock choices.

Criteria Required To Become An Sub-Broker

There are three types of categories to become an sub-broker or AP- Individuals, Partnership Firm and LLP or Body Corporate.

For individuals who want to become an sub-broker or AP, should:

  • Be a citizen of India
  • Not be less than 18 years of age.
  • Not have been found guilty of any crime involving falsehood and fraud.
  • Be of a good character and reputation
  • Achieve a minimum qualification of class X from a government recognized organization.
  • Have the necessary infrastructure like appropriate workspace, tools, and staffs that are available to efficiently carry out the tasks on behalf of the Trading Member.

For a Partnership firm and LLP that wants to become an sub-broker or AP should:

  • Ensure that all the partners and directors abide by the eligibility criteria of the individuals.
  • Permit a person to deal in the securities market through the Object Clause of the Partnership Deed and Memorandum of Associates.
  • Have the required infrastructure and other tools and staff to carry out tasks for the Trading Member.

What are the benefits of becoming an Authorised Person?

To become an sub-broker or Authorised person with SMIFS, there are many benefits. Some of these are:

1.     Highest Revenue Sharing

Sharing high revenue provides AP with a good profit. Generating high amount of revenue from the client lets the AP to share a portion of it with its partner.

2.     Highest account incentive

The more number of accounts an AP can create will benefit him/her with a good incentive.

3.     Lifetime income source

By working as an AP, one can create a passive source of income. Further, this can also turn out as a lifetime source of income for many individuals.

Become our Authorised Person and avail its benefits. Joining such a profession requires only an interest in the financial markets and an effective way of communicating with clients.

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