Building trust and compliance: Best practices for Authorised Partner in India

Authorised Partners must adhere to the best practices, such as ethical behaviour, regulatory compliance and consistent learning, in order to build long-lasting client relationships and gain credibility.

Investors often need to engage with Authorised Partners to participate in the capital market. The Authorised Partners are the professionals acting as intermediaries between investors and stockbrokers.

Authorised Partners streamline the investment process by serving as a point of contact for advisors and stockbrokers. Their objective is to maximise investors’ returns by aligning their goals with the best deals available in the market.

To ensure efficient operations, an Authorised Partner must adhere to best practices that uphold transparency, professionalism and regulatory compliance. 

Approval process by the stock exchanges for Authorised Partner

A stockbroker or trading member must seek specific prior approval from the exchange before appointing one or more Authorised Partners. Once selected, the stockbroker or trading member submits an application to the exchange, detailing the candidate’s qualifications and using specified formats. The exchange evaluates each application to determine if the candidate meets the eligibility criteria for an appointment as an Authorised Partner.

Qualification of an Authorised Partner

 To qualify as an Authorised Partner, an individual must be a citizen of India or a jurisdiction compliant with the Financial Action Task Force (FATF). They must also be at least 18 years old and have no record of economic or financial offenses both domestically and internationally. They must possess a reputable character and not be employed by another trading member of the exchange and should have passed Class 10th.  

Regulatory compliance

Those aspiring to become an Authorised Partner must first obtain a certification from NSE (National Stock Exchange of India), which is mandatory for engaging in trading activities. SEBI rules strictly define that no trading entity can engage with an Authorised Partner unless they possess a valid certificate issued by the regulatory body. To navigate the Authorised Partner registration process smoothly, NSE has outlined specific procedures that individuals must strictly follow.

Ethical conduct

Ethical conduct is of huge importance as far as an Authorised Partner is concerned, especially in the financial sector, where crores of rupees exchange hands daily. As such, the Authorised Partner needs to uphold the highest moral standards and avoid actions that could hamper client interests or affect market integrity.

Infrastructure and technology

An Authorised Partner must use advanced technology and infrastructure. This includes access to various trading platforms and tracking real-time data. Apart from technology, infrastructure, too, is crucial. An Authorised Partner must set up a physical office space, alongside hiring the required number of personnel to ensure there is no interruption in day-to-day operations. 

Knowledge and skill upgradation

To stay up to date with market trends, regulatory rules and investment opportunities, Authorised Partner need to keep broadening their knowledge base. They can do so by attending workshops or seminars, training programmes and getting relevant certifications. Apart from this, they also need to be in tune with economic trends, geopolitical developments and regulatory reforms, as all of these factors impact the financial markets and stock movements. 

Adapting to market dynamics and risk management

Flexibility and adaptability are the key for an Authorised Partner. They need to adopt strong risk management strategies to safeguard both clients and brokers against market fluctuations. This involves establishing clear risk limits, continuously monitoring positions, keeping track of major events worldwide and having strong contingency plans in place.