Who is an Authorised Person?
Equity has become a popular choice for Indian investors, and its popularity continues to grow as India hits a higher growth trajectory. It’s not hard to figure out why shares are so popular – stock market investments have been offering higher returns in the past few years. Of course, past performance doesn’t guarantee future returns, and there is market risk involved in equity investments. But, market fluctuation hasn’t deterred investors.
Individuals or institutions cannot invest in stocks and shares directly. Investors have to do it through brokers or broking firms like Angel One. These brokers are members of the stock exchanges authorised to trade on them. However, since the number of brokers is quite small, most of the work of investing is in the hands of authorised persons.
Authorised Person meaning
The authorised persons definition, according to the National Stock Exchange (NSE) is as follows: “An ‘Authorised Person’ is 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.”
Further, according to the NSE, all sub-brokers are required to obtain a Certificate of Registration from the Securities & Exchange Board of India (SEBI) without which they are not permitted to deal in securities.
Further, according to the NSE, all authorised persons are required to obtain a Certificate of Registration from the Securities & Exchange Board of India (SEBI) without which they are not permitted to deal in securities.
Trading Members and Authorised persons have to sign an agreement mandatorily. This agreement is about the rights and responsibilities of both.
Angel One appoints authorised persons to help clients gain from investment opportunities in the stock markets. Authorised persons deposit a refundable amount with Angel One and enter into an agreement with the company. In return, they’re paid a commission for every transaction they carry out.
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What is authorised person’s role?
Authorised persons (Formerly known as a Sub Broker) act as enablers for those who want to invest in the stock market or other investment avenues.
Authorised persons not only help investors with the buying and selling of shares, but they also play an educative and advisory role. Authorised persons help investors find the right stocks to invest in, understand the pros and cons of investing in stocks, and help out with various investment options like mutual funds, derivatives, commodities, and so on. Read More...
Who can become an authorised person?
Authorised persons don’t need to have higher education qualifications or years of experience to be an authorised person. However, some basic skills, like dedication and zeal to win, will come in handy if you want to be successful.
For example, knowledge of market movements and an acquaintance with the functioning of the stock market are qualities for any broker that would undoubtedly help. There must be awareness of shares listed on exchanges – what their potential is, the risks that are involved, and so on. An authorised person must be in a position to advise a client with confidence.
The person will also need excellent communication skills. He or she must be able to convince clients about the right way to invest in stocks. Since income will depend entirely on commissions earned, getting a large number of clients is essential. And this is not possible without excellent communication skills.
Note: The term “Sub-broker” is no longer officially used - any reference to sub-brokers is actually a reference to “Authorised Persons” (formerly known as a sub-brokers)
|Topic||Authorised Person (formerly known as Sub-broker)||Stockbroker|
|Roles played||An authorised person acts as an intermediary between the client and the stockbroker. They make sure the client is able to seamlessly utilise the various services offered by the Stockbroker.||A stockbroker operates independently. They can act as depository participants (DP) with the CDSL or NSDL.|
|Registration||Authorised persons have to be registered with the stock exchange and the broker but not SEBI.||A stockbroker has to be registered with the SEBI, the depository and the exchanges.|
|Sharing of Revenue||Authorised persons help stockbrokers expand their business by connecting them to clients. They also help the clients to make their trading experience better by offering them services of their own and the stockbroker’s.||Stockbrokers provide the framework and infrastructure under which investors can channel their funds into companies.|
What is an Authorised Person (formerly known as sub-broker)?
What are the benefits of a sub-broker?
Who can become an authorised person?
- Attain 18 years of age
- Education proof (10th pass)
- Have a valid PAN card and residence proof (i.e. Aadhar, electricity bill etc.)
- Have bank proof ie. cancelled cheque, bank passbook/statement etc.
- Have photo ID e.g. PAN/Aadhar card
Who can appoint a sub-broker?
How much does it cost to become a sub-broker?
Now that we have explained who an authorised person is, it is also easy to assist clients with a growing interest in the stock market and mutually benefit from it. Angel One provides infrastructure and marketing support. All you need is to become an Angel One Authorised Person and zeal to succeed.