Choice - Best Stock Broker in India
  • About
  • App
  • Services
    Services
  • Research
  • Partners
  • Contact
  • Log In
  • Open Demat Account
  • Home
  • Blog
  • ...
  • Sub Broker Meaning Explained
  • ...
    Sub Broker Meaning Explained

Sub Broker Meaning Explained

Sub Broker Meaning Explained
  • Published Date: January 04, 2021
  • Updated Date: January 29, 2025
  • By Team Choice

Sub broker (Authorised person) is a medium between a broker and an investor. This allows the investor to invest in an attractive opportunity without having to take risks or develop contacts.

To put simply, a stock market is a marketplace where buyers and sellers come together to buy and sell stocks. Sellers often list their stocks for trade, while buyers browse the available stocks to find the one they want.

Other than maintaining liquidity, a stock market plays an important role in the process of value creation and wealth distribution. A sub broker performs the same role as those in the stock market ecosystem.

We already have discussed much about the stock market sub-brokers. Let’s understand the meaning of sub-broker and how to open a sub broker franchise now in detail.

Table Of Contant


  1. What is Sub Broker in Share Market?
  2. Stock Broker vs Sub Broker
  3. SEBI Regulations for Sub Brokers
  4. Sub Broker and Authorised Person
  5. Benefits_Of_Becoming_a_Sub_Broker

What is Sub Broker in Share Market?

A sub broker (Autherised person) is the person who arranges transactions for buying, selling, or trading stocks on behalf of investors. This person works for stock exchanges and enables events to be officially recorded in an online portal.

Private companies can raise funds through networks or privately, while publicly listed companies should only use the general public to have monetary success.

A broker is a professional regulated individual who is authorised to trade shares on behalf of a stock exchange, and investors are people who have a vested interest in a publicly listed company.

Furthermore, sub brokers are different from stock brokers in that they do not engage in trades on the following exchange. Rather, they assist investors in certain transactions with the exchange members.

As more people are inclined towards investing in the growing stocks, the role of a broker becomes very crucial. More recently, the role of those who create links between those interested in purchasing shares and those with shares available for sale is becoming just as important as that of a broker.

Become a Sub Broker with Low Deposit.

  • Highest Revenue Sharing
  • Upto ₹ 1000 Per Account Incentive*
  • Local Branch Support
  • Lifetime Income Source
Apply Now

Stock Broker vs Sub Broker

A stockbroker is a person who fulfills the function of a middleman during transactions in the stock market.

Sub Brokers commission for executing transactions through them - which can include buying, selling or even handling day-to-day transactions such as payments and transfers.

A sub broker is a registered entity and acts as a liaison between the client and the broker. For instance, they will work with potential clients to educate them on various types of insurance products available. Essentially, these brokers act as liaisons between clients and agency partners.

A broker earns a brokerage fee by the transaction services they provide. All transactions done by a sub-broker can be processed through the main broker’s designated code. The brokerage fee is determined by the agreement made between the sub brokers and brokers.

In order to increase the reach to a broader market, a broker may need to collaborate with the sub brokers having a good client base. Sub brokers have been known to represent contractors when it comes to negotiating agreements for service.

SEBI Regulations for Sub Brokers

Earlier, it was mandatory that sub brokers (Authorised persons) must have to be registered with the Securities and Exchange Board of India (SEBI). It was made compulsory by SEBI that no deal could happen by trading members with a sub broker until a sub broker is registered with SEBI.

Certificate of Registration from SEBI was mandatory for them. Sub brokers and brokers were working together without any restrictions. Meaning that there was no limit to the number of sub brokers that work under a broker.

Now, as per the latest development, SEBI has stopped allowing sub brokers to register because people were switching to larger brands for better returns. But for SEBI, compliance costs increased & margins were falling down.

Brokers are important for executing trades by connecting traders with financial institutions. Traders depend on these brokers for brokerage services. As per the stats, the sub broker numbers have decreased from 9,606 to 2773  in the last five years. (Source: SEBI)

SEBI was quoted saying that new sub broker licenses will not be issued effective immediately. SEBI also confirmed that all brokers are now aware of their responsibilities starting April 1, 2019.

Moreover, the registration and certification of all sub brokers in India will be conducted by SEBI or any authority appointed by it. Hence, the need for ‘sub broker’ category as a market intermediary is not required.

This news may be shocking for some readers. Fear not, because there is also a solution!

Sub Broker & Authorised Person

If you’re worried about becoming a sub broker or if you are an existing sub broker, then pause for a breath & register as an ‘Authorised Person’.

SEBI sets a timeline for sub brokers to shift from being “sub brokers” to becoming “Authorised person”. but the question arises is there any difference between sub broker and an authorised person?

In order to join, individuals or companies must first register with the stock exchange instead of the Securities and Exchange Board of India (SEBI).

Both sub brokers and authorizers have the same duties. Although their registration process differs, a business must follow a set of guidelines when registering with the AP in order to legally trade their stocks.

The new process for sub brokers is easier and much less time-intensive. Now, instead of going through compliance after compliance, a software can actually do all the work for you.

To apply to the stock exchange, you need to apply separately for the different segments. Else, an application that mentions all segments may also be sufficient enough to do well in.

Being an Authorised Person - you have the part ownership of the company, voting rights, and your shares are kept as assets. In the derivative segment, an AP would have to take responsibility for buying or selling shares until the expiration.

Benefits Of Becoming a Sub Broker

Here are some of the benefits you might enjoy if you decide to become a sub-broker:

  • A sub broker’s seamless transactional experience is worth the stretch into contractually complicated dealings.
  • Make sure that you are making a triangular deal between client - broker - and sub broker while trading. This will put you in compliance and protect against frauds.
  • Working with a sub broker to buy and sell shares simplifies the buying or holding process, as they act as middlemen between investors. They will hone in on your objectives and guide you to make you understand what’s best for you so that your experience is less complex.
  • A sub broking can help you during the early stages of leasing out your land. Make sure they are qualified before selecting them to be your sub broker.

Wrapping Up

Discover how to work as a sub broker through a stock broking company. There are two paths to being a sub broker. First, you can have the knowledge of the financial markets and be adept at explaining them to others. Second, if you don’t know much about investing, or if you’re just starting out, you can start as one - through applying to financial institutions for the job.

Breaking into the industry can be a challenge for a newbie, but with perseverance and some entrepreneurial flair, you can find success.

You need to learn more about your sub broker role in different aspects of business, then you’ll know what functionalities you must perform while becoming involved. Be sure to seek advice from seasoned personnel, who could teach you how to be an “above average” sub broker.

In conclusion, learning from the people around you and following the proper steps will help ensure success. This will help you achieve success as a sub broker in the long run.

Recommended for you

loading

Garment Mantra Lifestyle Ltd Rights Issue 2025

loading

FII DII Data

loading

Crude Oil Price Forecast for Next Week

loading

How To Freeze And Unfreeze a Demat Account

Choice Financial Services
  • Services

  • Broking & Distribution
  • Wealth Planning
  • Insurance
  • Loans
  • Capital Advisory
  • Management Consultancy
  • Government Advisory
  • Tax Advisory
  • Company

  • Our Team
  • Investors
  • Calculator
  • Careers
  • Contact Us
  • Refer & Earn
  • FAQ’s
  • Resources

  • Fundamental
  • Technical
  • Blog
  • Pricing
  • Downloads
  • News & Media
  • Offer Document
  • Track Record
  • Investor Charter
  • Investor Grievances
  • Online KYC Updation
  • Quick Links

  • Open Demat Account
  • Corporate Demat Account
  • NRI Demat Account
  • Minor Demat Account
  • Lowest Brokerage
  • Investor Charter
  • Investor Awareness
  • Watchout Investors
  • Investor's Advisory
  • Disclaimer
  • CEBPL Policies & Disclosures
  • CFPL Policies & Disclosures
  • Sachet Portal
  • Direct Pay-in

Choice International Limited , Sunil Patodia Tower,
J B Nagar, Andheri(East),
Mumbai 400099.

Monday - Friday : 08:30 am - 7:00 pm
Saturday : 10:00 am - 4:00 pm

+91-88-2424-2424

care@choiceindia.com

Google Play
App StoreApp Store
  • Made with in India
  • Privacy Policy
  • Terms & Conditions

Choiceinternational. CIN - L67190MH1993PLC071117
Choice Equity Broking Private Limited: SEBI Reg No. Broking - INZ000160131 ( BSE - 3299 ) | ( NSE - 13773 ) | ( MSEI - 73200 ) | ( MCX - 40585 ) | ( NCDEX - 01006 ).
Depository Participant SEBI Reg. No. - IN - DP - 84 - 2015 , DP ID CDSL - 12066900 , NSDL ID - IN301895. Research Analyst - INH000000222
Choice Wealth Private Limited: AMFI - Registered Mutual Fund Distributor. Association of Mutual Funds in India Registration Number - ARN - 78908.
Initial Registration: 15th March 2010 Valid Till: 14th March 2027.
Pension Fund Regulatory and Development Authority (PFRDA) - POPSE52022022 | Affiliated with POP HDFC Pension Management Company.
Choice Finserv Private Limited: NBFC Registration Number : N - 13.02216

Choice Insurance Broking Private Limited: IRDAI License No: 167, License Valid Till: 29-05-2025 | Category : Direct ( Life & General )
Registered Office: Choice International Limited, Sunil Patodia Tower, J B Nagar, Andheri East, Mumbai, Maharashtra 400099.
For any Grievances / Queries email at ig@choiceindia.com & care@choiceindia.com | Online Dispute Resolution Link: https://smartodr.in/login

Cautionary Message :

  1. Sharing of trading credentials – login id & passwords including OTP’s:- Keep Your Password/Pin and OTP’s private & confidential to avoid any misuse or unauthorised trades. Please ensure that you do not share it with any one.
  2. Trading in leveraged products like options without proper understanding, which could lead to losses
  3. Writing / selling options or trading in option strategies based on tips, without basic knowledge & understanding of the product and its risks
  4. Dealing in unsolicited tips through Whatsapp, Telegram, YouTube, Facebook, SMS, calls, etc.
  5. Trading in “Options” based on recommendations from unauthorised / unregistered investment advisors and influencers

Disclaimer:
1. *Investments in securities market are subject to market risks, read all the related documents carefully before investing.
2. In addition to client based business, we are also doing proprietary trading.
3. Brokerage will not exceed the SEBI prescribed limit.

Research Disclaimer and Disclosure inter-alia as required under Securities and Exchange Board of India (Research Analysts) Regulations, 2014

Choice Equity Broking Private Limited (“CEBPL”) is a registered Research Analyst Entity (Reg. No. INH000000222 ) (hereinafter be referred as “CEBPL”). (CIN. NO.: U65999MH2010PTC198714).

Reg. Address: Sunil Patodia Tower, J B Nagar, Andheri(East), Mumbai 400099. Tel. No. 022-6707 9999 .

Compliance Officer: Mr.Prashant Salian. Tel. 022-67079999 - Ext-2310
Email- Prashant.salian@choiceindia.com

Grievance officer: Deepika Singhvi Tel.022-67079999- Ext-834.
Email- ig@choiceindia.com

Research Disclaimer: Investment in the securities market is subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

© Choice International Limited. All Rights Reserved.