Many people in India begin their careers in the stock market by working with a registered brokerage as a local intermediary. Officially, this role now continues under the Authorised Person (AP) framework. This is why understanding the sub-broker's meaning is still relevant today, even though the official system has evolved.
While the term sub-broker is commonly used, the current and recognised structure is called the Authorised Person (AP) model. Simply put, this role allows individuals to partner with a registered stockbroker and build a client-facing business in the capital markets.
In this article, you will learn what a sub-broker is, how the role works today, the earning structure, and how to choose the right sub-broker franchise partner.
What Is a Sub Broker?
A sub-broker is a person or business that helps investors trade in the stock market by working under a registered stockbroker. They are not direct members of the stock exchange but act as a link between the broker and the investor.
Today, SEBI no longer allows new sub-broker registrations. Instead, this role continues under the Authorised Person (AP) framework. Existing sub-brokers were moved into this structure.
In simple terms:
- An Authorised Person works under a registered stockbroker.
- The broker handles exchange membership and compliance
- The AP focuses on clients and business development
Key Points to Know
- APs are officially approved by the stock exchange through a parent broker
- Contract notes are issued by the main broker, not the AP
- Income is earned through commission on client trading activity
What Does an Authorised Person (Earlier Called Sub Broker) Actually Do?
The role does not merely involve buying and selling. A large part of this role also deals with people.
Common responsibilities include:
- Helping beginners understand investing: Helping the client with account opening and understanding how trading is done.
- Supporting trades: Guiding clients with order placement and guiding them on platform usage.
- Share basic market information: basic market information: Pass on research reports and updates given by the main broker in plain terms.
- Staying in touch with clients: Updating them about market movements, risks, and opportunities in an easy-to-understand way.
- Being the first point of contact: Helping with login issues, fund transfers, and general queries.
Many people start this role part-time and grow gradually into a full time as their client base increases.
Sub Broker Commission & Income Model
One of the reasons people look forward to this role is that it is based on performance pay. The Authorised Person does not receive an ordinary salary but receives payment in terms of a share of the brokerage paid by the clients he handles.
How to Choose the Best Sub Broker Franchise Partner
Choosing the right franchise partner matters more than just high commission numbers. A good partner makes learning, compliance, and daily work much easier.
Here are the key things to check:
1. Brand Reputation
Having a reputable and trusted brokerage firm work with you can definitely help to build client confidence. It makes investors feel more at ease to open an account with a broker who has a spotless record on the matter of compliance, as well as a solid market presence.
Since the parent broker is responsible for managing compliance, its record on regulations is also an important consideration.
2. Technology & Trading Platforms
Having user-friendly apps and systems is a huge benefit for you and your clients. Search for:
- Simple trading and mobile apps
- Fast order execution
- Access to equity, derivatives, and other segments
- Smooth back-office and reporting systems
Good technology reduces daily stress and improves client experience.
3. Training & Learning Support
This is particularly important for new players. Good franchise partners provide:
- Step-by-step onboarding
- Product and market fundamentals
- Guidance on certifications and compliance
- Continual learning through tutorials and videos
Websites such as Choice Connect provide training and learning assistance, which makes it easier for new APs to learn while handling client relationships.
4. Commission Structure & Costs
Always check:
- Revenue-sharing percentage across segments
- Any security deposit or upfront costs
- Whether costs are refundable
Some require high deposits, while others have low deposit systems, which would be very useful for small account holders.
5. Compliance & Documentation Support
Compliance is unavoidable in the stock market, but good partners simplify it.
Look for brokers that:
- Handle most regulatory paperwork
- Provide checklists and updates
- Guide APs on rules and disclosures
This allows you to focus more on clients instead of paperwork.
6. Product Range & Research Support
A wider product range helps you serve different investor needs.
Useful offerings include:
- Equity and derivatives
- Mutual funds
- Insurance products
Regular research reports and simple insights help build client trust and long-term relationships.
Challenges & Realities of the Business
Like any business, this role has its realities:
- Market ups and downs can affect trading volumes
- Client trust takes time to build
- Regulations change, so staying updated is important
Most new learners are able to overcome these problems by starting off slowly and using the support of the platforms they are working with.
Future Outlook of the Authorised Person Model in India
The changeover from sub-broker to Authorised Person has not led to a reduction in opportunities; instead, it has been more organised.
Going forward, the role will become more digital:
- Online onboarding and e-KYC
- Mobile-first trading platforms
- Automated compliance systems
As Tier-2 and Tier-3 investors become more active, there is continued demand for local market intermediaries.
This opens opportunities to people who may wish to develop an area concerning finance without necessarily moving to urban centres.
How Choice Connect Helps New Entrants
For individuals contemplating the world of capital markets, an online platform like Choice Connect makes it easy to overcome common obstacles to entry. Support includes:
- Easy onboarding as an Authorised Person
- Learning modules and training support
- Assistance from a dedicated relationship manager
- Business tools through mobile applications
- Access to multiple financial product categories like Insurance, Mutual Funds & more
This is a source of part-time income for many people, especially when learning about financial markets in a compliant manner.
Key Takeaways
A sub-broker, now officially called an Authorised Person, works under a registered stockbroker and helps investors with trading and account-related support. The earning structure is commission-based, with income linked to client activity and overall business volume.
Looking beyond the commission structure and identifying the right franchise is even more significant than that, as that will make working easier every day. For starters, proper education, friendly technology, and rules advice will best serve the trade. Also, platforms like Choice Connect provide a friendly interface for entry into the profession, which many people consider on a part-time level before expanding further.