If you are planning to become an Authorised Person in the stock market, it is important to understand how the system works. Who approves your application? Who keeps track of your activities? And who ensures that you follow the rules?

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In simple terms, an Authorised Person (often called AP) is someone who acts on behalf of a registered stock broker. APs help clients open accounts, trade in the market, and access other investment services. But since they deal with money and investors, their work is regulated and monitored closely.

We will explain in simple words who regulates Authorised Persons in India, what rules they must follow, and how this structure helps keep investors safe.

Who is the Main Regulator?

The main body that regulates the securities market in India is SEBI—the Securities and Exchange Board of India. SEBI was set up by the Government of India to protect investors and ensure fair practices in the stock market.

Every stock broker in India must be registered with SEBI. And every Authorised Person works under a stock broker. So, while APs don’t report directly to SEBI, the rules they follow are created and enforced by SEBI.

SEBI sets the eligibility criteria, registration process, code of conduct, and penalties in case of violations. This means that even if you are an AP in a small city or town, you are still working under the rules made by SEBI for the whole country.

Role of Stock Exchanges

Apart from SEBI, the two main stock exchanges in India—National Stock Exchange (NSE) and Bombay Stock Exchange (BSE)—also play a big role in regulating Authorised Persons.

When you apply to become an AP, your application goes through these exchanges. They check your documents, verify your background, and make sure you meet the required standards.

Once approved, the stock exchange issues a registration number and tracks your performance through your associated broker. They can also issue notices, request audits, or take action if rules are broken.

So, even though you are not directly employed by the stock exchange, your activities are monitored by them to ensure investor safety.

Your Stock Broker is Also a Regulator

Your broking partner like Motilal Oswal, is the one you report to daily. They provide you with access to the platform, products, training, and client support. But they also have a duty to monitor your conduct.

As per SEBI and exchange rules, brokers must:

• Ensure that you follow compliance and risk management guidelines

• Maintain records of your clients and transactions

• Train you on investor protection and ethics

• Take immediate action if you break any rules

This means that while you are independent in running your sub-broking business, your broker acts as your supervisor too. A responsible broker will guide you, keep you updated, and ensure that your business runs within legal boundaries.

What are the Key Regulations for Authorised Persons?

Here are some basic rules every Authorised Person must follow:

1. Registration: You must be registered with the stock exchange through your broker. You cannot operate as an AP without formal approval.

2. Eligibility: You should meet minimum qualification, age, and infrastructure criteria as defined by SEBI and the exchange.

3. Conduct: You must follow the code of conduct, avoid mis-selling, and act in the best interest of your clients.

4. KYC and Compliance: You must help clients complete their KYC and ensure proper documentation for every transaction.

5. Recordkeeping: Maintain records of client onboarding, trades, and service logs.

6. No Misuse: You should never use client accounts for personal trades or give false promises about returns.

These rules are in place to protect clients and help you build a long-term, trustworthy business.

Why Regulation is a Good Thing

Some new partners worry about too many rules. But regulation actually helps you grow. It keeps the market clean, protects your clients, and builds trust in your services.

When you work under clear and respected rules, more people are willing to invest through you. You also get support from your broker and the exchange to stay compliant and avoid mistakes.

With a strong brand like Motilal Oswal by your side, you will always have help in understanding and following the rules—so you can focus on growing your business confidently.

Conclusion

In India, Authorised Persons are indirectly regulated by SEBI, directly registered through stock exchanges, and monitored by their stock brokers. This three-level structure ensures that clients are protected and APs follow the right path.

If you are serious about building a long-term career in stock broking, choosing the right partner is the first step. A trusted and responsible broker not only supports your business but also helps you stay compliant and professional.

Become a Trusted Authorised Person with Motilal Oswal

Here is what you get:

• SEBI and exchange-compliant onboarding

• Expert guidance to meet AP eligibility criteria

• Full support in documentation and approvals

• Ongoing training in rules, ethics, and compliance

• Relationship manager and back-office assistance

Visit motilaloswal.com/partner-corner to get started.
Work legally, grow ethically, and scale your sub-broking journey with a partner that puts your success first.

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