The Indian stock market continues to generate more investors as more Indian citizens comprehend the benefits of Investing. By the end of 2021, as per the data by SEBI (Securities and Exchange Board of India), there were more than seven crore Demat account holders. That was more than double the number of Demat account holders in 2019. Authorized SEBI stockbroking firms provide Demat account and trading account services. With the increasing interest in investing in the stock market, the stockbrokers providing those services are constantly upscaling their operations and widening their reach. That has led to a growing demand for sub brokers within the country.
If you are well acquainted with the stock markets and aspire to start your own business, sub broking is one of the best careers to choose. However, before you learn how to become a sub broker, you need to understand what it entails to be a sub broker.
What is a Sub Broker?
In simple words, a sub broker is the agent of a stockbroker or stockbroking firm. Like how the stockbroker links investors to the stock exchanges, the sub broker connects investors to the stockbroker. The broker entrusts the sub broker with the responsibility of attracting more clients and assisting them with investment-related darlings. The sub broker helps their client base make informed trading and investing decisions. For that, the sub broker must possess the expertise to guide their clients and provide tips to invest in the market. A sub broker may earn a specific cut from the transactions made by the client using the stockbroker’s trading platform.
Easy Steps to Become a Sub Broker
Now that you know what a stockbroker is, read through the following steps to understand the process of becoming a sub broker.
Step 1: Approach the Best Stockbroker
To enroll as a sub broker, you must choose a stockbroker with the best sub broker franchise model. To find that out, you must diligently research which stockbroking firm provides the best business model, opportunities and incentives. At the same time, you also assess the stockbroker’s reputation and digital presence. It would be best if you chose a leading stockbroker with a solid brand name and network across the country.
Step 2: Find Out The Eligibility Criteria
After doing your due diligence and selecting the stockbroker offering the best sub broker model, find out the eligibility criteria to partner with the stockbroker. The eligibility requirements are not hard to meet, as they are pretty basic. Most brokers ask for a minimum education qualification of 10+2 or HSC (High Secondary Education). However, having a graduation degree in a related field like finance or economics will surely help. Besides educational qualifications, you must know the securities market. Good communication skills are also necessary since you must build relationships and assist your clients.
Step 3: Form Filling and Documents Submission
The next step is to fill out the sub broker application form, sign the agreement between the stockbroker and the sub broker, and submit the necessary documents. You can submit the following documents in each category to complete the sub broker application process.
- Identity proof document: PAN card or Aadhaar card
- Address proof document: Latest electricity bill, valid ration card, driver’s license, passport, or bank statement of the previous month
- If your qualification is lower than HSC, submit a proof of experience document.
You then submit the documents and pay a processing fee of Rs 2,000 plus GST.
Step 4: Application Verification
Once the stockbroking firm receives your documents and the processing fee, it forwards your application to the stock exchanges. The exchange scrutinizes your application for discrepancies, and the stock exchange would send the documents back for correction if found. In that case, make the ratifications and re-submit your documents. If your application is free of discrepancies, then the exchange approves your application.
Step 5: SEBI Registration
After the exchange approves your application, the last thing you have to do is register yourself with SEBI. Similar to how a stockbroker requires SEBI’s license to provide Demat account services, a sub broker also needs SEBI authorization to provide services. You pay the registration fee to obtain the SEBI license. When you get the SEBI registration fee receipt, you will get a sub broker registration certificate and a registration number.
After successfully completing the above mentioned steps, you become an official SEBI registered sub broker. Consider selecting a leading stockbroker like IIFL Securities as your partner. With IIFL Securities, you get access to cutting-edge technology, personal assistance, and a solid back-office infrastructure. IIFL’s high revenue sharing model is another reason you should become a sub broker with IIFL Securities.
