Introduction
Both the Indian stock market and the associated business possibilities are booming. Large trading businesses work with local business owners to grow their clients because they are unable to reach every area of the nation on their own. Understanding the difference between a sub broker and an approved person is a crucial first step if you plan to become one.
What is a Sub Broker?
A sub broker is an agent who helps clients buy, sell, or deal in stocks by working as a go-between for a qualified stockbroker and individual customers. They helped with order processing, financial advice, and customer growth. However, in 2018, SEBI officially stopped accepting new sub broker registrations and forced present sub brokers to either give up their licenses or become approved people. Therefore, in a strict sense, the sub broker model is no longer in use.
What is an Authorised Person?
An person, partnership company, LLP, or corporate body chosen by a qualified stockbroker to give clients access to trade systems is known as an Authorized Person (AP). In 2009, SEBI created this idea, which took the job of the earlier sub broker scheme. Under an official contract with their main agent, APs help with customer onboarding, allow trade, provide financial advice, and keep accurate records.
Sub Broker vs Authorised Person: Key Differences
| Factor | Sub Broker | Authorised Person |
| Registration | Registered with SEBI | Registered with Stock Exchange |
| Current Status | Discontinued since 2018 | Active and current model |
| Scope of Work | Client acquisition and order execution | Broader — includes trading, advice, and record-keeping |
| Legal Structure | Tripartite agreement | Direct written agreement with one stockbroker |
The underlying difference is structural and legal. Sub brokers used to have to register directly with SEBI, but APs listed through stock markets like the NSE or BSE. However, the daily tasks are pretty much the same.
Eligibility Criteria
You must meet the following basic standards in order to be an approved person,
· Age: at least eighteen
· Education: Completion of 10+2 from an approved school is needed.
· Clear Background: No past of financial scams or illegal behaviour
· Market Knowledge: While not necessary, NISM qualification is highly recommended. A basic knowledge of stock markets is important.
· Types of Entities: Applications are taken from people, listed businesses, LLPs, and joint companies. HUFs are not qualified.
· Since sub broker registrations are discontinued, those eligibility criteria are only relevant for historical reference.
Registration Process
For an Authorised Person:
· Choose a Stockbroker — Choose a broker with a fair revenue-sharing plan, good technology, and SEBI registration.
· Fill the Application — Send in your information, including your home, skills, PAN, and Aadhaar.
· Sign the Agreement — Sign a written contract describing your duties and trading share.
· Exchange Submission — Your broker uploads your details to the exchange via the ENIT portal
· Pay the Fees — Registration fees are typically ₹5,000 + GST
· Receive Your AP Code — Once verified, the exchange issues your official Authorised Person Code
For Sub brokers: Since registrations are closed, the process is no longer applicable for new applicants.
Documents Required
· PAN Card
· Aadhaar Card
· 10+2 Educational Certificate
· Address Proof (electricity bill, passport, or bank statement)
· Cancelled Cheque
· Passport-size Photographs
· Signed Agreement with the Stockbroker
· Infrastructure Declaration (office space and equipment availability)
Who Should Choose This?
The AP model suits you if you are a local entrepreneur with a trusted network, want to earn through brokerage revenue sharing (typically 60%–90%), and prefer low startup costs without heavy compliance burdens. If you enjoy building client relationships and working flexibly, this is one of the most accessible ways to enter the financial services industry today.
Conclusion
The opportunity to become a sub broker no longer exists in its traditional sense, but the authorised person model offers everything it once did — and more. The income potential is substantial, the application process is easy, and compliance is doable. You are prepared to create a major business in India’s growing capital markets if you choose the appropriate broker, meet the licensing requirements, and finish your paperwork.
