Can Authorised Person Work From Home?

4 mins read
by Angel One

With the pandemic raging across the country, stock market regulator SEBI has relaxed traditional trading guidelines to allow authorised persons to trade from locations other than the ones reported to the exchange. This has allowed brokers and authorised persons to work from home or other locations of their preference. Since the introduction of the compliance relaxations last year, brokers and authorised persons have successfully managed to operate trading terminals from home and other remote locations.

These relaxations introduced in the month of March 2020 were successfully implemented and worked like a charm. After the successful work from home implementation, many are arguing the practical merits of continuing the remote access framework. As a result, this has strengthened the argument that modern trading platforms are electronic and should not be reliant on a physical location.This has come as a good news for brokers and authorised persons who can conveniently trade from remote locations of their choice.

For individuals with knowledge about financial markets and products, the new guidelines are a great opportunity to start a business as an authorised person. To get started as an authorised person, the requirements are very minimal and require very less capital. Additionally, this proves a great place to start as the participation levels for authorised persons are minimal with only .4% of the Indian population involved in the business of trading stocks.

So How Does This Work

Under normal circumstances, whenever a stock broker operates a terminal from a particular location, that place is considered his branch office and will require display of name boards and stock broker’s certificate. Brokers were required to register the location with SEBI. However, since the location rules were relaxed, exchanges were allowed to trade from locations other than the registered ones. As a result brokers and authorised persons were given an exemption on trade locations and had the freedom to choose a location of their preference.

To get started, an authorised person needs a computer (desktop or laptop) with a strong internet connection. authorised persons should also have fairly good knowledge about working on computers and be hands on with various trading platforms. In order to coordinate with other traders and clients, a web camera and other communication devices like a mic will be required. If you are excited about starting a authorised persons business from home, here are a few other eligibility criteria to get started.

–    Passed at least 10+2. (as per the regulations). Ideally authorised persons should possess at-least a graduation degree.

–    Knowledgeable about financial markets, either by virtue of prior work experience or by knowledge and should be able to understand and manage the basic financial transactions with ease.

–    Up-to-date with latest information related to economic, politic and environment topics. Every bit of information may not be interesting news, but will definitely affect the stock market one way or the other.

–    Well versed in computer skills. This includes various trading platforms and tools.

–    Should possess good communication skills, and remember to value your customers above all.

–    Should have good management skills, after all every business after a point is all about good management of money, man, market and all other resources.

–    Should clear basic NISM modules on equities, mutual funds, commodities, F&O. The regulations require that the authorised person activities cannot be conducted unless requisite modules are not cleared.

Capital Required for Work From Home authorised persons

Requirement Frequency Type of Investment Notes
Initial Deposit with Broker One Time Capital Investment Varies from one broking house to another. Can vary between Rs. 30,000 and Rs. 300,000.
Initial registration One Time Capital Investment One time registration fee. Can vary between Rs. 15 -20,000.
Computer, workstation, and television One Time Capital investment Unavoidable expenses. Research good deals on electronics before buying.
Internet connection Monthly Working Expense Choose a high-speed fibre optic broadband connection.
Monthly Rent NA NA Work from home
Salary and overhead Monthly Working Expense Depends on various aspects like city of location and employee skill.
Utility bills, miscellaneous expenses NA NA Work from home

Final Thoughts

While most businesses came to a standstill during the lockdown, trading continued through these difficult times. Starting a business as an authorised person is prudent considering how resilient the industry has been through these most difficult times. As explained earlier, the cost to set up an authorised person firm has drastically reduced during the work from home scenario. If you are looking to start a work from home business, being an authorised person would undoubtedly be a wise choice.