Start Authorised Person with a trustworthy partner that can help you to grow up.
Join NowChoice has an extensive portfolio of product offerings backed by more than 25 years of experience. Authorised Person have the option to offer the entire range of financial products.
Start NowAs a SEBI Authorised Person, you can be a part of the well-known and respected Choice group. Register with any Stock Exchange (NSE/BSE) and be a Authorised Person in the Stock Market with a reputed brand.
Anyone who wishes to create a passive source of income.
See the per account incentive offer in the below table
Number of Accounts | Account with minimum Rs. 1,000 Investment & 2 transaction | Account with minimum Rs. 25,000 Investment & 2 transaction |
---|---|---|
10-99 | 100 | 200 |
100-299 | 150 | 400 |
300-1999 | 250 | 500 |
2000+ | 400 | 1000 |
The following documents are required to complete Authorised Person registration with us.
Over the years, the responsibilities of an authorised person have primarily remained the same. However, an increase in the number of Demat accounts has impacted these professionals' commissions and general earnings.
But before diving deep into the nuances of the role, it is crucial to delve into the standard definition of an authorised person and understand why stockbrokers are constantly looking to employ them.
NSE defines an authorised person as a "person who is appointed as such by a trading member and who provides access to trading platform of a stock exchange as an agent of the stock broker."
The simplest authorised person meaning can be translated as 'an individual registered with a particular exchange to execute trades on behalf of an investor.'
Essentially, an authorised person does not hold power to execute trades or charge brokerage fees from investors looking to start their investment journey. However, they are recognised by SEBI to work under a stockbroker, provided a written agreement is in place.
However, the meaning of authorised person does not mean the role is only restricted to individuals. It can also be provided to organisations, provided they follow some set guidelines by SEBI.
An authorised person is only permitted to work with one stockbroker per exchange. They also require certification from the relevant exchanges. For instance, a BSE-authorised person can only work with NSE if they acquire a certificate from the latter.
Authorised persons can either work with one stockbroker who deals with various segments or collaborate with different brokers targeting different segments in the market.
While a stock market authorised person usually works individually with different stockbrokers, they can choose to pursue a more significant business opportunity with the franchise model. This model is primarily employed by colossal broking houses, which permit authorised persons to operate under their brand name under a set of predetermined commercial terms.
Think of it as a restaurant trying to expand by awarding franchises in different locations.
Stockbrokers follow the same model. Granting franchise rights allows them to expand their visibility while helping the authorised persons to attract significant investors. These franchisees also train authorised persons in several facets of the securities and stock market, adding to their knowledge of equity trading.
Overall, working in a franchise provides individuals with the initial push they need to supplement a reliable reputation in the market. But it comes with its fair share of challenges, including a binding agreement with fixed earnings that may be lower than commissions enjoyed by authorised persons.
SEBI has laid down specific eligibility criteria for individuals looking to enjoy a flourishing career as authorised persons with various Indian exchanges. The principle requirements are:
For franchise models, individuals have to fulfil additional criteria which differ according to the stockbroker.
More often than not, the terms authorised persons and sub brokers are used interchangeably. While the functions of these two professionals are strikingly similar, they are inherently different from each other.
The significant points of difference between authorised person and sub broker are:
However, both these roles thrive on commission and cannot indulge in receiving direct payments or brokerage charges from investing parties. Hence, there is no winner in the authorised person vs sub broker debate; both possess their own merits.
Once the agreement between a stockbroker and an authorised person is confirmed, the duties of authorised person include the following:
An authorised person earns a fixed commission for every trade executed by the investors they helped bring to the stockbroker. This scalable payscale is highly lucrative and can trump other income sources during high trading volumes.
Given the nature of their role in simplifying investment decisions and helping onboard more clients for stockbrokers, the individuals applying for this role are expected to be well-versed with:
Apart from these skills, stockbrokers might also require mandatory documents to confirm certain aspects of your identity.
The documents might vary according to the stockbroker.
Unlike sub brokers, registering to become an authorised person does not involve a complex registration process to gain the SEBI licence.
On the contrary, NSE claims that a person or a firm can be qualified as an authorised person when they enter into a written agreement with a stockbroker using a form mandated by the relevant exchange. The form should entail the following:
Once the agreement is completed and verified, the individual is officially recognised as an authorised person for the stockbroker.
So, if you plan to become a stockbroker, study the financial markets extensively. Once you acquire the relevant knowledge and understand the working of different segments, you can register as an authorised person with a reputed stockbroker like Choice India and earn significant commissions!