Authorised Persons (APs) are important participants in India's securities market and play a key role in connecting investors with registered stockbrokers. They assist clients with trading-related services, account opening, and operational support, acting on behalf of a stockbroker. Earlier, similar intermediaries were commonly referred to as sub-brokers. Under the current regulatory framework prescribed by the Securities and Exchange Board of India (SEBI), the term Authorised Person is used.
Individuals and institutions cannot directly trade on a stock exchange. They must invest through SEBI-registered stockbrokers who are Trading Members of recognised stock exchanges. Authorised Persons work with these stockbrokers to help expand their reach and provide better services to investors.
##Authorised Person Meaning
An Authorised Person is an individual or entity appointed by a SEBI-registered stockbroker to provide trading-related services to clients on the broker's behalf.
Unlike stockbrokers, Authorised Persons are not Trading Members of a stock exchange. Instead, they operate under the appointing stockbroker's registration and assist clients with activities such as account opening, order placement, trading platform support, and other operational services.
The relationship between a stockbroker and an Authorised Person is governed by an agreement that defines the rights and responsibilities of both parties in accordance with SEBI and stock exchange regulations.
##Responsibilities of an Authorised Person
The role of an Authorised Person is regulated by SEBI and the recognised stock exchanges. They are expected to comply with the applicable regulatory framework while assisting both stockbrokers and investors.
##Responsibilities Towards the Stockbroker
Authorised Persons work under the stockbroker's brand and support business growth by expanding the client base and improving customer service.
Some of their key responsibilities include:
Acquiring new clients for the brokerage.
Assisting clients with account opening and KYC formalities.
Maintaining proper client documentation and records.
Ensuring compliance with the broker's internal policies and applicable SEBI and exchange regulations.
Coordinating with the stockbroker to resolve operational issues and client queries.
##Responsibilities Towards Clients
Authorised Persons act as the first point of contact for many investors.
Their responsibilities include:
Helping clients open trading and demat accounts.
Assisting with order placement and transaction-related queries.
Helping clients understand trading platforms and available investment products.
Providing operational support and account-related assistance.
Coordinating with the stockbroker for the timely resolution of client concerns.
They should always maintain transparency in their duties and comply with applicable regulatory requirements.
##Responsibilities Towards the Securities Market
Although Authorised Persons are not exchange members, they contribute to the smooth functioning of the securities market by:
Promoting investor awareness.
Following ethical business practices.
Assisting investors in accessing capital market services through registered stockbrokers.
Supporting efficient execution of transactions through the broker's infrastructure.
##Who Can Become an Authorised Person?
A higher educational qualification or extensive industry experience is not always mandatory. However, knowledge of financial markets, good communication skills, and the ability to build client relationships can be valuable.
The eligibility criteria generally include:
An individual, partnership firm, Limited Liability Partnership (LLP), company, or other eligible entity may become an Authorised Person.
An individual applicant should be at least 18 years of age.
The applicant should meet the eligibility requirements prescribed by the relevant stock exchange and the appointing stockbroker.
The applicant should have a clean regulatory and legal record.
A basic understanding of financial markets and trading is desirable.
Adequate office infrastructure and operational resources may be required, depending on the broker's business requirements.
##Advantages of Being an Authorised Person
Working as an Authorised Person offers an opportunity to build a business in the securities market while partnering with a registered stockbroker. The benefits may vary depending on the brokerage firm and the business model.
##Opportunity to Grow Your Business
An Authorised Person helps expand the broker's client base by acquiring new investors and maintaining long-term client relationships.
##Access to Multiple Investment Products
Depending on the broker's offerings, clients can invest in a range of financial products, including:
Exchange-Traded Funds (ETFs)
Initial Public Offerings (IPOs)
Futures and Options (F&O)
Commodities and currencies where supported by the broker
##Technology and Operational Support
Most brokerage firms provide Authorised Persons with access to trading platforms, back-office systems, client management tools, and operational support to serve clients efficiently.
##Training and Business Assistance
Many brokers organise regular training programmes, product updates, and compliance sessions to help Authorised Persons stay updated with market developments and regulatory changes.
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