An Authorised Partner must be at least 21 years old and should not be a trading member of any stock exchange. They should also not be a registered member, shareholder, or partner of a registered Authorised Partner.
The Indian Stock Market has grown significantly following the setback faced during the pandemic phase. Market valuations of listed companies, the number of Demat accounts opened in the last three years, and the number of new listings on the bourses all indicate rapid growth. As more people enter the stock trading space, new opportunities are opening up for all stakeholders, including Authorised Partners working under large brokerages.
Stock Brokers and Authorised Partners are crucial links between the market and clients. They serve as guides and facilitators for newcomers who need guidance in stock trading.
Brokers and Authorised Partners are known for their expertise in all aspects related to stock trading. They help investors navigate the complexities of the markets. Ultimately, brokers and Authorised Partners onboard new investors and make their clients' stay in the market easier, contributing to the expansion of stock trading businesses.
Difference Between a Stock Broker and a Authorised Partner
A Stock broker serves as an intermediary between an investor and the stock exchange. On the other hand, an Authorised Partner works under a stock broker and is a vital link between the stock broker and clients.
Working under the direction of reputed brokerages, the Authorised Partner follows all the guidelines and instructions of the affiliated broking firm while onboarding new clients and executing transactions.
With the expanding sphere of stock trading, the role of Authorised Partners has gained even more prominence in recent years, as they are actually doing the legwork for big brokerages. Authorised Partners, also referred to as Authorised Persons (APs), are actually the face of the big brokerages. They help the brokerage firms expand their business by onboarding new clients.
While the brokerages are registered with the stock exchanges and the capital market regulator Securities and Exchange Board of India (SEBI), there is no such mandatory registration for Authorised Partners.
Those who aspire to venture into the business of sub-broking must first understand the Authorised Partner eligibility criteria. They should also be aware of the nature of the responsibilities undertaken by Authorised Partners.
Eligibility Criteria for a Authorised Partner
The qualifications for becoming an Authorised Partner vary from broking firm to broking firm. However, in this write-up, we will discuss the general qualifications and eligibility criteria for Authorised Partners. Let's take a look at the specifics of the Authorised Partner qualifications and eligibility criteria:
- To become an Authorised Partner, one needs to have completed at least class 12th, as per SEBI guidelines. The individual must possess basic knowledge of financial markets, including trading processes and financial transactions.
- An Authorised Partner should be proficient in operating computers and basic software such as Excel, and have technical expertise in managing online trading platforms.
- Good communication skills and interpersonal abilities are a must for an Authorised Partner, as onboarding clients requires these traits.
- The individual must be at least 18 years old and should not be a trading member of any stock exchange. They should not be a registered member, shareholder, or partner of a registered Authorised Partner.
- There should be no history of defaulting in any other stock exchange, and there should be no pending criminal or fraud cases against an Authorised Partner.
Besides the above-mentioned qualifications, there are certain other requirements one must fulfil to become an Authorised Partner.
Good understanding of the financial market: To become an Authorised Partner, one must have a good knowledge of the financial market. The job involves advising clients on their investment strategies and recommending investments to them.
Knowledge of the economy: The Authorised Partner should understand how markets function. It's equally important to learn about events and influencers affecting the economy.
Persuasive quality: For all stakeholders, the Stock Market business is full of competition and needs perseverance to be successful. Given the competitive nature of stock broking, an Authorised Partner must be persuasive in his approach to succeed.
Awareness of international markets: An aspiring Authorised Partner must be aware of global developments. Knowledge of national financial markets and economies might not be sufficient, and Authorised Partners must stay updated about global events as they influence sentiments in the Indian markets.
Computer savvy: A Stock Broker or Authorised Partner must be computer savvy and know technology. In today's times, investors trade electronically on the Stock Markets so this quality takes an Authorised Partner far.
Conclusion
Sub-broking has emerged as a promising business venture for those interested in the financial markets. Numerous stock broking houses in the country offer their own sub-broking services and partnership programs for aspiring Authorised Partners. However, individuals must fulfil the qualification requirements and other eligibility criteria to become Authorised Partners.