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Difference between Sub Broker and Authorised Person

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05 Aug 20216 mins readBy MOFSL

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Most individuals are quite aware that it is a challenge to engage in share transactions without any aid. A majority of investors seek the help of brokers to do this effectively. Brokers are experts in the field of trading and investing and if you choose an experienced and known brand, like Motilal Oswal, you can be assured of business growth in stock market. Many transactions related to shares are done by individuals called sub-brokers (also known as Authorised Persons). Plan your investments the smarter way with Brokerage Calculator.

While beginning with your investment, always look for a reliable financial partner such as Motilal Oswal. Always see the features they provide, such as the all-in-one trading platform to invest in different stock market options, automated processes, online account opening, timely payout, multiple Demat Scheme as per client needs, etc.

If you wish to start your own business with a stockbroker, there are two different options you can choose from. You can either choose to start a sub-broker franchise or become an authorized person.

Contrary to popular opinion, a sub-broker and an authorized person are not one and the same. They’re slightly different in terms of eligibility criteria, duties and responsibilities, and the amount of initial investment that you’re required to make.

Therefore, if you’re seriously considering a career in the stock market, it is crucial for you to know the difference between a sub-broker and an authorized person. And that’s what we’re going to be looking at in this article.

Difference between Sub-Broker and Authorised Person:

The key differences between a Sub-Broker and an Authorised Person have been tabulated below for easy understanding.

Consideration Area Sub Broker Authorised Person
Meaning A sub-broker is a person who works on behalf of a trading member of a recognized stock exchange. A person appointed by a stockbroker and as an agent gets access to the trading platform of a stock exchange.
Registration Registered with SEBI Just needs to fill an agreement form with the stockbroker.
Initial deposit ₹50,000 - ₹3,00,000 Minimum ₹10,000 or NIL
Revenue sharing ratio As per mutual commercial terms As per mutual commercial terms
Responsibility Just like an extension branch of the stockbroker so takes almost all responsibility of a stockbroker. It has a bit less responsibility than a sub-broker.
Agreement Sub-broker enters into the tri-party agreement AP enters into the two party agreement.

 

Related Blogs: Roles and Function of a Sub Broker | Sub Broker Franchise Without Deposit | GST Compliance On Stock Broking Services | Sub Broker Business Model | Roles and Responsibilities of Sub-Brokers

 

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Disclaimer: The stocks, companies, or financial instruments mentioned in this blog are for informational purposes only and should not be considered as investment recommendations. It is advised to consult with your financial advisor before making any investment decisions. Investment in securities markets are subject to market risks, read all the related documents carefully before investing. Investors are strongly encouraged to carefully read the risk disclosure documents prior to participating in market-related investments or trading activities. Due to the volatile nature of financial markets, no guarantees can be made regarding investment returns. Motilal Oswal Financial Services Ltd. does not offer any assured returns on market-linked securities. Please note that past performance of stocks or indices is not indicative of future results.
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