An Authorised Partner facilitates the buying and selling of market securities, such as shares, through a broker's platform. They are appointed by brokers to extend services and expand business.
Retail investors cannot directly buy securities like equity shares and bonds from stock exchanges or capital markets, relying instead on brokers or brokerage firms, which are SEBI-registered entities holding trading rights in recognised stock exchanges. These entities act as intermediaries between investors and capital markets, facilitating transactions of equity shares and other financial instruments.
The Securities and Exchange Board of India (SEBI) has authorised various market intermediaries, including Authorised Partners, to facilitate retail investor participation. Authorised Partners assist in buying and selling market securities through brokers, attracting new clients and aiding existing clients in investment decisions. Brokers or brokerage firms can appoint one or more Authorised Partners after obtaining stock exchange approval.
Key functions of an Authorised Partner include:
- Providing useful stock exchange tips and assisting in investment decisions, though they are not members of the stock exchange themselves
- Helping brokers expand their client base and increase sales by working under the broker's brand
- Ensuring proper documentation and completing investor KYC formalities
- Assisting clients in making informed investment decisions to potentially profit from securities markets
- Monitoring developments like dividend payouts, stock splits, and regulatory changes, and informing clients accordingly
Any eligible person can become an Authorised Partner, subject to broker-set criteria for education and skills. Stock exchange rules mandate agreements between member-brokers and Authorised Partners, defining their rights and responsibilities. All Authorised Partners must obtain a Certificate of Registration.