Benefits of Becoming an Authorised Person

Benefits of Becoming an Authorised Person

Written by Deepak Bhagat, In Business, Published On
August 5, 2022

Recently, the stock market has seen both bulls and bears fight vigorously, and the movements the industry saw enticed many people and attracted a lot of people wanting to build their careers in the stock market. Stockbrokers appoint authorised persons who help the clients by providing a platform where they can trade and help them in the process.

Who is an Authorised Person?

An authorized person is a professional registered with SEBI appointed by stock brokers and trading businesses to offer customers access to stock exchange trading platforms and help them as they go through their investment journey. Since you can’t invest in the market on your own and need to broker either electronic or human, an authorized person is classified as an agent of the stockbroker who helps you do precisely that.

An authorized person has more authority. That’s why a large chunk of sub brokers become authorized persons, as they enjoy more commission and more authority.

Benefits Enjoyed by Authorised Person

SEBI introduced the model of authorized person in 2009 to help stockbrokers provide ease of access to investing in stock exchanges with the help of a qualified person. An authorized person enjoys lots of benefits such as:

  • Low Investment

The cost of entry to become an Authorised Person is meager compared to the revenue one can generate being an Authorised Person. The initial investment can be as low as Rs 1,00,000 and can go up to Rs 10,00,000 depending on which type of securities you will be dealing with.

  • High Earning

A stockbroker provides a different revenue sharing method to an Authorised person. The most prominent one is in the form of commission on the brokerage fees. The commission as revenue sharing to an Authorised Person can range between 60%-90% depending upon the trading volume generated by the Authorised Person. The revenue earned is entirely derived from the brokerage, not the customer.

  • Ease of Setup

Instead of investing in your resources, a stockbroker provides the Authorised Person with all the resources they would need, such as research, advisory, and help desks. This makes it easier to get your footing in the market.

Authorized persons get full access to trading platforms such as web or mobile applications, and even more, tools are shared with them by the stockbroker.

  • More Options for Trading

An Authorised person can trade in equity, currency, futures and options, and even commodities if the stockbroker has a domain in that as well. This puts them at a huge advantage over a sub-broker mainly confined to equity and mutual funds. Hence they can provide their client with more options for trading and investing.

  • Marketing and Support

A stockbroker gives full support to the Authorised Person for marketing and support in many manners. The broker takes care of marketing and advertising online and offline because they are the ones profiting at last, so a stock broker ensures that you succeed.

The stock market will see a huge boom in the upcoming year with the new technology on the rising edge, and more and more people are starting to invest in the stock market due to ease of access. There is no better place to be in the stock market than being an authorized person.

Related articles
Join the discussion!