What is a Sub Broker and What Do They Do?

The growth of stock markets over the years is largely attributable to the large number of investors who enter the market almost daily. Consequently, brokerages are thriving. The brokers are not the only ones who benefit from a stock market growth. Sub brokers (also known as Authorized Person) also gain, and if you want to establish a sub broker franchise, you should understand the role of a sub broker.

The Authorised Person – the Sub broker

As the stock markets have continued to expand, they have stimulated the birth and growth of yet another sector. In India, the brokerage business is massive. If you want to open a demat account and understand the ins and outs of trading in the equity markets, you’ll need the help of a broker, who are in great demand because of the high demand for stock market investments. Online stock trading is made simpler by the fact that most brokerages provide fully digitalized interfaces. The sub broker franchise operates inside the larger brokerage industry and plays a significant role in the financial sector.

The sub broker’s (or Authorized Person’s) duties in the investment industry may or may not involve direct investment activity. When there were very few digital options for making investments, the sub broker (or Authorized Person) role was established. However, this practice continues today since it serves a crucial purpose in the brokering business. A sub broker—what exactly is that? A sub broker (or Authorized Person) operates as an intermediary between a broker and an investor and performs many of the same functions as a broker.

The Roles of a Sub broker

Once you know what a sub broker (or Authorized Person) is, you can understand what services they may provide. The stock broker’s job is to act as a go-between for the investor and the stock market. When a sub broker is involved, they may communicate with clients on the broker’s behalf and help resolve certain investment difficulties. A sub broker can help you invest in an initial public offering (IPO) without ever having to speak to a broker directly.

Sub brokers are an integral part of the broker’s team and are generally responsible for bringing in new business. The sub broker’s duties also include offering complementary services to their customers. Because of the sheer volume of clients and investments they handle, some large brokerages turn to sub broker franchises for assistance in managing and growing their business. When acting on behalf of a brokerage, a sub broker (also known as a “authorised person”) is able to issue confirmation and contract notes. When a stock trade has place, they are distributed to the buyers and sellers. The Securities and Exchange Board of India (SEBI) regulates and licenses all sub brokers in the country. In addition, sub brokers (also called Authorized Persons) receive compensation based on the volume and value of business transacted via them.

A World of Opportunity

Stock brokers, sub-brokers, and investors all play important parts in the expansion and upward trajectory of the stock market, which opens up a world of possibilities for all parties involved. The brokerage and the sub broker (also known as Authorised Person) each play an important part in the process of opening a demat account and investing in an initial public offering (IPO). Sub-brokers can learn the ropes from stock brokers while also earning commissions and doing lucrative business.