How to become a sub-broker in the stock market

stock broker



The popularity of the Indian stock market has risen dramatically, with millions of ordinary people opening Demat accounts. Nonetheless, neither institutional investors nor regular investors are allowed to trade directly with stock exchanges. Rather, to trade in the secondary market, individuals need to get in touch with a stockbroker and open a Demat account. The idea of sub-brokers has arisen in order to meet the increasing demand and rising clientele. Sub-brokers are essential in helping clients with the process of opening an account and making investment choices.

In this blog, we will go into great detail on the definition of a sub-broker, the advantages of working as one, and a step-by-step tutorial on how to become one in India.

Understanding the responsibilities and duties of a sub-broker is crucial to learning how to become one yourself. A sub-broker is a person who operates as a middleman between a client and a Trading Member, or stockbroking firm, as defined by the National Stock Exchange. A sub-broker helps with transactions and communication between the stockbroker and the investor, in contrast to a stockbroker who links investors to the stock exchange directly.

A sub-broker must meet certain requirements in order to become one. Prospective candidates must pursue a comprehensive understanding of the financial sector, current market patterns, and pertinent laws. Acquiring the requisite knowledge might be facilitated by completing relevant training or educational courses.

It is crucial to obtain the necessary certificates and licences. These certifications provide credibility with prospective clients in addition to guaranteeing compliance with regulatory requirements. Developing a solid professional network and cultivating customer trust are other essentials for becoming a prosperous sub-broker. A smooth mediation process between the broker and the customer is made possible by effective interpersonal and communication skills.

Who is a sub-broker?

Anybody who is not a trading member of the stock exchange is considered a sub-broker or an authorised person. However, they may function as an agent under their brand on behalf of the stockbroker. They work for the broker to help investors with securities transactions. At any level, one of the best enterprises is a stock market sub-broker company. It’s possible to become successful in the stock market quite rapidly if you have knowledge of it or are prepared to learn. A key player in the Indian finance sector, an authorised person deals directly with investor clients.

What are the key responsibilities of a sub-broker?

Come, let’s understand the key responsibilities of a sub-broker.

Client Acquisition: Finding and gaining potential clients interested in trading or investing is the responsibility of sub-brokers. They persuade clients to open an account by outlining the advantages of their brokerage firm and getting to know their financial objectives.

Client Activation: Sub-brokers are essential in helping clients get started with trading by providing guidance and support. In addition to helping with platform navigation and making sure clients are prepared to start trading, they offer training sessions.

Client Servicing: Sub-brokers assist customers on a continuous basis by making trading calls, handling transaction-related problems, and guaranteeing customer happiness. They work hard to provide top-notch services and keep customers by providing outstanding assistance.

Stock Tips and Calls: In order to enhance their trading judgements and cultivate client loyalty, sub-brokers frequently provide clients with investment ideas, recommendations, and advice.

Compliance with Regulatory Rules: Sub-brokers follow the guidelines established by regulatory agencies and stock exchanges, confirming customer information, helping with paperwork, and guaranteeing KYC compliance.

Research and Analysis: Sub-brokers carry out their own independent research and analysis to give their clients insightful information that will assist them in making wise investment selections.

Account Opening Assistance: Sub-brokers help customers open trading accounts by offering advice and making sure the procedure goes well.

Order Execution Support: Sub-brokers accurately and quickly carry out client orders, either as dealers or terminal operators, upon request.

Who can be a sub-broker?

Authorised individuals must register under the name of a registered broker because they are not members of stock exchanges. You will have instant access to the trading platform, goods, and services offered by the broker. When you carry out the orders on your client’s behalf, it will make the procedure go more quickly and smoothly. Additionally, the fact that you are associated with a well-known brand name will make it easier for you to win over customers.

An authorised agent may be anyone over the age of 21.

  • 10+2 is the minimal qualification needed. But obviously, having a degree from an accredited school is a plus.
  • The applicant must possess a rudimentary understanding of the industry or, at the very least, a few years of relevant job experience.
  • To run the trading platform and handle a client’s account, you would require computer literacy.
  • When working with clients, effective communication is crucial.
  • As these issues impact the stock market, one should be well-versed in economics, politics, and finance.
  • According to the regulation, stock market-authorized individuals must pass the foundational NIMS modules in F&O, mutual funds, stocks, and commodities.

How can you start a career as a sub-broker?

This is a comprehensive tutorial explaining the prerequisites and step-by-step methods for starting a career as a sub-broker in the financial business in India.

Choose the Right Sub-Broker Franchise Model: Start by investigating and assessing the many sub-broker franchise models that are available from stockbroking firms. Examine each of their business models carefully, then decide which best fits your needs and objectives.

Check Eligibility Criteria: Once you have chosen a sub-broker franchise model, review the eligibility criteria set by the stockbroking house. Generally, the criteria for individuals are straightforward and easily met.

Prepare and submit documents: Once you are certain that you fit the requirements, compile the required paperwork. Usually, these consist of:

  • Application for Sub-Broker Registration
  • Signed Contract between the Stockbroking House and the Sub-Broker;
  • Proof of Address (phone bill, electricity bill, ration card, passport, etc.);
  • Proof of Experience Certificate (if applicable);
  • Any Additional Documents Necessary;
  • Pay Processing Fee: Along with the submission of documents, you will need to remit a processing fee of Rs. 2,000 plus GST to the stockbroking house.

Application Submission and Payment: The stockbroker will electronically transmit your application to the exchange and pay the processing charge for the sub-broker application form on your behalf as soon as they receive your documents and payment.

Document Verification: The documents will be carefully examined by the exchange to make sure there are no errors. The exchange will return the application form and supporting documentation to the stockbroking company for correction and subsequent resubmission if any problems or inadequacies are found.

Registration Fees: After the exchange approves the application form, you must send the stockbroking house the required SEBI registration fees. The stockbroker will subsequently pay the exchange fees on your behalf. This step completes your registration as a sub-broker and guarantees adherence to SEBI laws.

Sub-broker Registration Certificate:: After the receipt of the SEBI registration fees, you will be issued a sub-broker registration certificate from SEBI, in addition to a distinct registration number. With the help of this certificate, you are formally acknowledged as a sub-broker and given permission to do stock market business. You may easily handle the process of how to become a sub-broker by adhering to the aforementioned step-by-step technique.

Advantages of Working as a Sub-Broker

The advantages of working as a sub-broker, (emphasizing the rewards and career growth prospects that come with the position) have been mentioned below:

  • Financial expertise: There are several advantages to becoming a sub-broker or a member of a sub-broker franchise, including the acquisition of financial expertise. Undertaking work for a broker provides sub-brokers invaluable knowledge and understanding of the stock market. They are more equipped to comprehend market dynamics and make wise selections regarding their own transactions thanks to this knowledge. Sub-brokers are not authorized to operate as brokers; nonetheless, they are still able to trade personally with any broker using their own money. Sub-brokers are more equipped to assist their clients and further their own financial journeys thanks to their self-sufficiency.
  • Extra services: Being able to provide clients with services other than investing advice and tactics is another benefit of being a sub-broker. Certain brokerage firms permit their sub-brokers to provide their clients with other services including loan options and mutual fund distribution. Sub-brokers can increase their revenue and promote the expansion of their sub-broker franchise by broadening the range of services they offer and earning commissions from these ancillary services.
  • Minimal Investment Amount: The minimal expenditure needed to become a sub-broker is one of the main advantages. In contrast to other financial endeavours, sub-brokers do not require a significant initial investment to commence operations. The franchiser covers the vast majority of the costs. To start as a sub-broker, a small quantity of money, say 10,000 rupees or more, is all that is needed. Sub-brokers can potentially make limitless commissions on the transactions of their clients, regardless of the initial commitment.

In India, becoming a sub-broker presents a viable route into the exciting world of the stock market. We have looked at the steps and requirements needed to become a sub-broker through this detailed guide. Those who wish to start a profitable sub-brokerage business can do so by selecting the best sub-broker franchise model and submitting the required paperwork and payments.



Leave a Reply