Authorised Partners need to adhere to regulatory standards and are monitored by the brokerage house they are enrolled with. The brokerage house ensures that the Authorised Partner working under its license follows market rules and ethical practices.
An Authorised Partner works as an intermediary between a stock brokerage firm and clients. They assist clients in buying and selling securities but are not members of stock exchanges. Operating under the license of a brokerage house, Authorised Partners guide clients in the securities market with investment decisions and transaction executions.
Authorised Partners are usually affiliated with large brokerage firms, which provide resources, infrastructure, and brand recognition to attract business. Using the brokerage firm's name helps Authorised Partners approach clients, although they are not directly granted access to stock exchange systems.
Authorised Partners earn commissions or fees from the brokerage house for their services. They must adhere to regulatory standards set by authorities and stock exchanges and are monitored by the brokerage house to ensure compliance with market rules and ethical practices.
Strategies and skills required to become a successful Authorised Partner
To become an Authorised Partner of a brokerage house, the first requirement is to register with the National Stock Exchange (NSE). Before becoming an Authorised Partner, one needs relevant certification from the National Institute of Securities Markets (NISM). After completing NISM certification, one must affiliate with a registered brokerage house.
Once an agreement with the brokerage firm is signed, the Authorised Partner must comply with all legal and regulatory requirements mandated by SEBI.
Educational qualifications and financial skills required
To become an Authorised Partner of a brokerage house, the following steps and requirements should be met:
- Background and Knowledge: Background in finance or a related field; understanding of stock markets, trading, and investments.
- Certification and Registration: Obtain NISM certification; register with SEBI to become an Authorised Partner.
- Office and Infrastructure: Set up offices and infrastructure for efficient client transaction management and services.
- Brokerage House Inquiry: Expect inquiries from brokerage houses regarding financial skills, technology understanding, office space availability, and online trading experience.
Responsibilities of Authorised Partners
Client acquisition and management: Onboard new clients and manage investment portfolios; provide personalized service to understand clients' financial goals, risk tolerance, and investment preferences
Investment advice: Offer tailored investment advice based on market analysis; recommend stocks, bonds, and securities to help clients achieve financial goals
Trade execution: Facilitate trade execution through the brokerage house by placing buy or sell orders on behalf of clients.
Maintaining client relationships: Build and sustain strong client relationships through regular communication about market developments and portfolio performance; address client queries and concerns.
Authorised Partners must comply with regulatory requirements and ethical standards set by SEBI when dealing with clients to maintain credibility and operate legally.
Staying informed about market trends
Key to Authorised Partners' success is staying updated on market developments, economic conditions, new investment products, and emerging fintech trends. This ensures they provide relevant and accurate advice to clients.
Conclusion
Authorised Partners act as intermediaries between clients and brokerage houses, guiding clients in investment decisions without stock exchange membership. Starting as an Authorised Partner requires SEBI registration, NISM certification, and affiliation with a registered brokerage house. Compliance with SEBI regulations is essential, and Authorised Partners earn commissions and fees for their client services.