Starting in the stock market can be very nerve-racking; being an Authorised Person is one of the easiest ways to get to the high road as it earns huge revenue in commissions ranging between 60%-90% and enjoys tons of benefits from the brokerage.
Who is an Authorised Person?
An Authorised Person is a professional registered with SEBI and is appointed by stock brokers and Trading firms who provides access to trading platforms of the stock exchange to the clients as an agent of the stock broker is classified as an authorised person.
An authorised person earns fees, commission, salary and stocks from the stockbroker. All his earnings come from the brokerage stock broker makes and not from the clients.
Difference Between Sub-broker Vs an Authorised Person
A sub broker works under the brokerage and sells or buys equity on behalf of a client. On the other hand, authorised persons are appointed by stock brokers to provide the client with the trading platform. Authorised persons can trade in equity, mutual funds, futures and options, everything the stock broker offers, while sub-brokers generally only trade in equity.
Before, the authorised person could work only with registration under the stockbroker, but after August 2018, both sub-broker and authorised person must register themself with SEBI or shut their business.
Eligibility Criteria of Becoming an Authorised Person
As per SEBI, a person who wants to be appointed as an authorised person should be:
- Citizen of India.
- Over 18 years old.
- 10th standard qualified or equivalent examination.
- Should not have any criminal or offence record.
- Should have relevant experience and infrastructure to operate as an authorised person
For a Partnership Firm or Body Corporate, They Have to be:
- First and foremost, they should be a resident of India.
- Affiliated with a partnership firm registered under the Indian Partnership Act of 1932
- A Limited Liability Partnership (LLP) registered under the Indian Limited Liability Partnership Act of 2008.
- A legal entity established under the Indian Companies Act of 1956.
Documents Required for Registration
- A CA-certified balance sheet, profit & loss account, and the Schedules annexed.
- A signed statement from the Authorised Person stating that he is willing to act as one and would follow all applicable requirements.
- PAN Card
- DOB Proof
- Address Proof
- Academic qualification Proof
- Proof of Experience, i.e. the person should possess at least 2 years of experience in dealing with securities.
- Bank Draft or Cheque.
- GST form or certificate if applicable.
Fees
- Processing fees of Rs. 10,000 plus GST
- Admission fees of Rs. 5,00,000 plus GST (Except “Only Debt”)
- Admission fees of Rs. 1,00,000 plus GST (For “Only Debt)
The Registration Process for an Authorised Person
The Registration process can seem a bit too long, but when you go one step at a time, you will become an Authorised person in no time.
- Choose the stockbroker of your choice who you want to be affiliated with.
- Connect with the stock broker and discuss roles and revenue-sharing model details.
- Provide all the required documents to the stockbroker
- The stockbroker will verify your documents and run a background check on you, and if he sees you as a candidate, they will provide you with an AP agreement.
- Then The stockbroker will help you register on a stock exchange.
- After filling out the application for the stock exchange, you will upload scanned copies of the required documents.
- The stock exchange will verify your documents, and you will be approved.
After you get the approval and become a stock exchange registered AP, you can set up your business and enjoy the high revenues.
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