Who is an Authorised Person? Meaning, Benefits, and How to Register

Who is an Authorised Person?

An authorised person (formerly known as sub broker), as per the Securities and Exchange Board of India (SEBI), is an individual or entity who is working on behalf of a stockbroker providing stock trading facilities. They are not directly members of the stock exchange but trade through a registered stockbroker. Their primary work is to help investors sell and purchase shares and facilitate smooth and regulated trade.

An authorised person plays a central role in the financial system by adding to the stockbroker's business, acquiring customers, and ensuring compliance with stock exchange rules. They work very closely with investors, advising them on market movements, executing trades, and providing after-sales support.

Who Can Be an Authorised Person?

You can be an authorized person with an interest in the stock market if you meet some requirements. You don't need a high level of qualification or experience in stock trading. Some skills can help you succeed:

• Intense interest in financial markets
• Good communication and negotiation skills
• Information about the general mode of doing business in the stock market
• Capacity to acquire and manage clients

Being an authorised person is one of the finest ways to become a part of the stock market career without the hassle of opening a brokerage house.

Tasks and Duties of an Authorised Person

The role of an authorised person pervades different aspects of the business of trading in stocks. He or she acts as a bridge between investors and stockbrokers so that all the activities are performed efficiently.

Guiding Investors with Trading and Investments

One of the most important responsibilities of an authorised person is to advise clients on making good investment choices. They educate investors, provide investment recommendations, and facilitate buying and selling of securities.

Expanding the Business of a Stockbroker

An authorised person works for a stockbroker and helps to increase their customer base. This involves:

• Winning new investors
• Convincing existing clients to invest more
• Rendering personalized investment advice

Ensuring Compliance and Transparency

Since stock market investments are regulated by the provisions prescribed by SEBI and stock exchanges, an authorised person ensures all transactions comply. They ensure transparency by keeping records of accounts and verifying documents.

Extending Customer Support and Market Insights

Authorised persons extend post-sales service to investors through:

• Informing them about their investments
• Providing stock market trend tips
• Helping them with account queries

By offering these services, an authorised person enhances the overall trading experience for investors and increases their business as well.
 

Advantages of Being an Authorised Person

Numerous individuals opt to be an authorised person due to the numerous advantages that it offers. Some of the key benefits include:

Low Initial Investment

As compared to starting a stockbroking business that requires a large amount of capital, an authorised person is affordable. Most stockbrokers possess a nominal security deposit, and it is an ideal affordable business opportunity.

High Earning Potential

An authorised person gets a commission from trades placed by their customers. The more they acquire customers and the more trades they facilitate, the more profit they make. Authorised people mostly make a decent source of passive income in terms of trading commissions.

Flexibility and Independence

An authorised person works as an independent professional under a stockbroker. In other words, they are allowed to work on their own schedule while taking the advantages of services and facilities offered by a highly established brokerage company.

Access to Stock Market Intelligence and Training

Most stockbrokers provide authorised people with recurring training sessions and market information. This enables them to improve their knowledge about finances and remain familiar with market tendencies.

Chance to Establish a Scalable Business

Most individuals start as an authorised person and then expand their businesses by acquiring more clients. With hard work and determination, this can be a very profitable business in the long term.

How to Register as an Authorised Person?

If you wish to be an authorised person, you need to undergo a formal process to register with a stockbroker and a stock exchange.

Step 1: Choose a Stockbroker

The first step is to partner with a reputed stock broker registered with SEBI. Selecting the right stockbroker is crucial as they provide the platform, tools, and support necessary to succeed in this role.

Step 2: Meet the Eligibility Criteria

To qualify as an authorised person, you must meet certain basic criteria:

• Must be an Indian citizen
• Should be at least 18 years old
• Should have passed at least 10th standard (higher qualifications preferred)
• Should not have any history of financial fraud or dishonesty
• Should be aware of the fundamentals of the stock market

Step 3: Fill up the Application Form

Once you have chosen a stockbroker, you need to fill in the Authorised Person Registration Form and submit the same along with the necessary documents.

Step 4: File Required Documents

You need to file the following documents to register:

• Proof of identity (PAN Card, Aadhaar Card, or Passport)
• Address proof (Utility bill, rental agreement, or bank statement)
• Educational qualification certificates
• Passport-size photographs
• Cancelled cheque or bank details for commission payments

Step 5: Pay the Registration Fees

Stock exchanges charge a small amount for registering an authorised person. However, the actual figure may vary depending on the stock exchange and brokerage firm.

Step 6: Approval from the Stock Exchange

After you have submitted your application, the stock exchange verifies the details and processes the application. If everything is in order, they approve the application and issue an Authorised Person Registration Certificate.

Step 7: Start Your Business as an Authorised Person

The moment you have obtained the registration certificate, you can begin onboarding clients and making trades under the supervision of your stockbroker.

Skills Required to Succeed as an Authorised Person

To become a successful authorised person, you will need to possess some skills:

Strong Communication Skills – Ability to communicate market trends and investment alternatives to clients.
Basic Financial Knowledge – Knowledge of the stock market, trading methods, and risk involved in investments.
Client Relationship Management – Establishing trust and long-term client relations.
Sales and Marketing Skills – Acquiring new clients and growing your network.
Regulatory Awareness – Understanding SEBI regulations and compliance requirements.

Conclusion

The role of an authorised individual is vital in ensuring smooth operation in the stock market. As an intermediary between stockbrokers and investors, they help traders make informed investment decisions while growing the brokerage business.

The work of an authorised person is instrumental in enabling seamless trading within the stock market. Through their function as a bridge between investors and stockbrokers, they empower investors to make informed investment decisions while advancing the business of the brokerage. This is a great profession for those wishing to enter the stock market with minimal initial capital.

With proper guidance, knowledge, and dedication, an authorised person can gain a prosperous career in the financial market. They have access to market information, training, and ongoing assistance from brokerage houses so that they may grow their client base and income over a period of time.