How to Become Sub Broker

Who Is a Sub-Broker?

A sub-broker is an individual who acts as an intermediary between a trading member (stockbroking firm) and the client, functioning similarly to a broker but bridging the gap between these two parties. While stockbrokers connect investors to the stock exchange, sub-brokers connect investors to stockbrokers.

The role of a sub-broker involves mediating between the broker and the client, assisting clients with financial transactions and paperwork, actively participating in business development, maintaining the quality of client trades, offering investment advice and stock tips to clients.

Also Read: What is Sub Broker

The Profession of Sub-Broking

With the shift towards online brokerage platforms in the Indian financial market, sub-brokers have become essential. They act as intermediaries between clients and online brokers, helping clients open Demat accounts and assisting them with investment decisions. Sub-brokers work with specific online brokerage firms, attracting new customers and earning commissions based on client transactions.

It’s important to note that while sub-brokers facilitate trading, they are not trading members of the stock exchange but are authorised to act on behalf of trading members with valid Demat accounts.

Qualifications to Become a Sub-Broker

If you are wondering how to be a sub-broker in India, to become a sub-broker, certain qualifications are necessary

1. Completion of secondary studies (10+2) as per SEBI regulations.

2. Basic knowledge of financial markets, including Demat accounts, trading processes, and financial transactions.

3. Technical skills in computer operation and software usage, especially online trading platforms.

4. Good communication skills for client onboarding and relationship management.

How to Become a Sub-Broker

Now that you understand who a sub-broker is, let’s delve into the detailed steps on how to become one:

• Step 1: Choose the Sub-Broker Franchise Model

Your journey as a sub-broker begins by selecting the sub-broker franchise model you want to be a part of. To do this effectively, carefully examine the business models of various stockbroking houses and choose the one that aligns with your preferences and goals.

• Step 2: Check Eligibility Criteria

Before proceeding further, it’s essential to check the eligibility criteria, which are relatively basic for individuals. Ensuring you meet these criteria is crucial before moving on to the application process.

• Step 3: Gather Required Documents

Once you confirm that you meet the sub-broker eligibility criteria, the next step is to compile all the necessary documents to submit to the chosen stockbroking house. Here’s a list of the documents you’ll need to provide:

a. Sub-broker registration application form.

b. A duly signed agreement between you and the stockbroking house.

c. Proof of your residential address. Ensure that the address on this document matches the one on your application form. 

Acceptable proof of address documents include:

   i. Latest telephone bill.

   ii. Latest electricity bill.

   iii. Valid ration card.

   iv. Valid passport.

   v. Valid driving licence.

 vi. Bank statement from the previous month.

d. Proof of experience certificate (applicable only if your qualification is lower than HSC).

e. Any other relevant documents as required.

• Step 4: Remit Processing Fee

In addition to submitting the necessary documents, you’ll be required to pay a processing fee. This fee typically amounts to Rs. 2,000 plus GST.

• Step 5: Forward Application to the Exchange

After receiving your set of documents and processing fee, the stockbroker you’re partnering with will electronically submit your application to the exchange. They will also handle the payment for processing the sub-broker application form on your behalf.

• Step 6: Scrutiny by the Exchange

Once your application reaches the exchange, it undergoes a thorough examination to ensure there are no deficiencies. In case any issues are identified, the exchange will send your application form and documents back for correction and subsequent re-submission.

• Step 7: Remit SEBI Registration Fees

Upon successful approval of your application form by the exchange, you’ll need to remit the requisite SEBI registration fees. The stockbroker you’re associated with will handle this payment on your behalf, forwarding it to the exchange.

• Step 8: Receive Registration Certificate

After the exchange receives your SEBI registration fees, you’ll be issued a sub-broker registration certificate from SEBI, along with a unique registration number. At this point, you are officially recognized as a sub-broker.

Becoming a sub-broker offers exciting opportunities in the financial market, allowing you to earn commissions while helping clients with their investments. This detailed guide should provide you with the necessary information to embark on a successful sub-broking career in India.

Also Read: Authorised Person vs Sub Broker

Conclusion

Becoming a sub-broker in India can be a lucrative profession, offering earnings through commissions. To become a sub-broker, understand the sub-broking process. In India’s online financial market, online brokerage platforms offer quick trading. Some still prefer intermediaries for Demat accounts and investments. Sub-brokers bridge clients and online brokers, earning commissions based on client transactions. They aren’t trading members but act on behalf of valid Demat account holders.