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How to Become a Sub Broker in India?

How to Become a Sub Broker in India

With the glaring speed at which the Indian stock market is growing, there seem innumerable opportunities for profits for investors in all spheres. This booming interest, coupled with the emergence of multiple startups in every niche has accelerated the significant need for brokers and sub-brokers to enable trading in the stock market. With a plethora of opportunities to explore, becoming a sub-broker is quite simple, especially if you have the best brokerage firm to guide you. In this article, therefore, we will break down for you the steps on how to become a sub-broker in India.

But first, let us delve into the basics.

Who is a Sub Broker?

The National Stock Exchange defines a ‘Sub Broker meaning’ as “any person who is not a Trading Member of a Stock Exchange but who acts on behalf of a Trading Member as an agent or otherwise for assisting investors in dealing in securities through such Trading Members.”

Trading Members are required to enter into an agreement with all Sub-Brokers, with the agreement laying down the rights and responsibilities of both parties in detail. The Sub Broker must also be registered with SEBI, as a prerequisite to indulge in their operations.

Diving into some more details, a sub-broker has functions similar to that of a broker, that is, acting as an intermediary. The only difference is that the sub-broker mediates between the broker and a client. In most cases, sub-brokers work for brokers, their main task being bringing clients to the brokerage firm and assisting the former with investments and security dealings. In this process, they can earn a certain cut from the transaction as well.

How to Become a Sub Broker in India?

Step 1: Choose Your Stockbroking Firm

The first step to becoming a stockbroker in India is to carefully choose the stock brokerage firm that you wish to be part of. This step is extremely important for you to decide the sub-broker business model you would be interested in working with, as it will have an impact on your day-to-day operations, incentives, and more. Always ensure that apart from high incentives and certainty of growth, you also look into the networking, experience, digital presence, and product offerings of the brokerage firm. Choice emerges as an obvious choice in this respect, with these and many other benefits lined up for its stock sub-brokers in India.

Step 2: Eligibility and Document Requirements

The next step would be to go through the eligibility criteria, which is quite basic, and submit all the duly filled relevant documents asked for with the stockbroking firm you are interested in partnering with. Along with the documents, interested individuals or businesses must also submit a processing fee plus GST.

Step 3: Application Scrutiny and Approval

The stockbroker then forwards your application electronically to the National Stock Exchange for validation and approval, along with making the processing fee payment on your behalf. The idea is to carefully scrutinize your document lest there should be any discrepancies or deficiencies. If this is the case, the exchange would return your documents for correction and subsequent re-submission.

Step 4: SEBI Registration

Once your sub-broker application has been reviewed, you would require registration with SEBI with a fixed fee through your firm itself. After SEBI acknowledges your fee payment and registration, you would be sent a sub-broker registration certificate along with a unique registration number. From here on, you will be officially considered a sub-broker.

Documents Required to Become a Sub Broker

There is a set of specific documents, as of the latest data, that you would have to send as scanned physical copies attached with their sub-broker registration application form, as per the mentioned format. As elaborated by NSE, these include:

  • Proof of Address of the Applicant Entity (trade name): A mandatory requirement, the address mentioned in the proof document should match that on the application you have filed. Acceptable documents include the latest telephone bill, electricity bill, valid ration card, valid passport, valid driving license, and bank statement of the last one month from a nationalized bank.
  • Proof of Experience certificate: This requirement is mandatory only if the individual/partner/director applying has qualifications less than HSC. You need to provide proof of experience of at least two years in the capacity of an employee/dealer in the capital market in the name of an individual/partner/director for it to be acceptable.
  • The agreement between stockbroker and sub-broker

Eligibility to Become a Sub Broker

The precise eligibility standards and sub-broker qualifications required may additionally vary depending on the trading member you desire to associate with. Broadly speaking, but, these are a number of the qualifications which you ought to satisfy or possess.

  • Must have a minimum qualification of H.S.C
  • Must be 21 years of age or above
  • Must no longer be a trading member of the alternate
  • Must no longer be a registered sub-broker with another trading member
  • Must no longer be a shareholder or associate of a registered sub-broker
  • Must no longer be a defaulter in another stock trade.


Benefits of Being a Choice Sub Broker

  • Able To Get Valuable Stock Market Knowledge: Gaining expertise and information is one of the most tremendous benefits of operating as a sub-broker or as part of a sub-broking franchise cost. Working as a sub-broker gives them access to critical stock market statistics that they can use to enhance their marketplace consciousness and private trades. Although they cannot act as stockbrokers, they can nevertheless deal privately with any broker using their belongings. This self-maintaining loop no longer only permits sub-brokers to higher serve their customers but also lets them to enhance their investments as nicely.
  • Chace To Become Professional Broker: Another gain of being a sub-broker is that the brokerage company in that you function may permit you to provide offerings to clients other than funding advice and approach. A few brokers, for instance, encourage their sub-broker franchisees to promote mutual fund delivery and mortgage offerings to their clients.
  • High Initial Income: Some other advantage is that as a sub-broker, you don’t want a massive preliminary charge due to the fact the franchise covers the rest of the prices. To begin their profession as sub broking, sub-brokers simplest need small funding, say 10,000 rupees or greater.

Wrapping Up

  • Any person who is not a Trading Member of a Stock Exchange but who acts on behalf of a Trading Member as an agent or otherwise for assisting investors in dealing in securities through such Trading Members
  • A sub-broker incorporates out the same characteristics as a broker incorporates out, being the intermediary between two parties.
  • A sub-broker has functions similar to that of a broker, that is, acting as an intermediary.
  • Sub Broker works for an individual broker or broking firm
  • The Sub-Broker must also be registered with SEBI, as a prerequisite to indulge in their operations.
  • To register for sub-broker you must go from 5 steps

Step 1: Choose Your Stockbroking Firm

Step 2: Eligibility and Document Requirements

Step 3: Application Scrutiny and Approval

Step 4: SEBI Registration

  • The precise eligibility standards and sub broker qualifications required may additionally vary depending on the trading member you desire to associate with.
  • There are many career possibilities for being a sub-broker, such as:
  • Able To Get Valuable Stock Market Knowledge
  • Chace To Become Professional Broker
  • High Initial Income.
  • Sub-broker is a beneficial job or a business, particularly for folks who are interested in the stock markets and for people captivated with investing.
  • Nowadays, some of the leading stockbroking homes in the country offer their own sub broking and partnership programs for human beings inquisitive about becoming sub-brokers.

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