Given how quickly the Indian stock market is booming, there appears to be countless possibilities for investors to make money. The huge requirement for brokers and sub-brokers to facilitate stock market trading has increased due to this increasing interest and the rise of several startups in every speciality. Being a sub-broker is pretty easy given the abundance of options available, especially if you have the top brokerage business guiding you. Therefore, we will outline the processes for you in this post on how to become a sub-broker in India.
Table of Contents
Defining a Sub-Broker
Sub-brokers are financial experts who serve as a middleman between a security’s buyer and seller. They are compensated by assisting customers in getting the best bargain possible, and they frequently know more about a given security than either the buyer or the seller.
- Although sub-brokers may be found in various markets, they are particularly prevalent in the stock and bond markets.
- The majority of sub-brokers collaborate with large brokerage companies, although many also operate on their own.
- A sub-primary broker’s responsibility is to assist buyers and sellers in settling on a price for the securities. They try to match buyers and sellers. They also look for additional buyers or sellers who are interested in purchasing or selling the same security.
Essential Qualifications
You must first be aware of the requirements for sub-brokership in order to become a sub-broker. To become a sub-broker, one must meet a number of requirements. The standards may change depending on the stock brokerage firm you choose to work with, but the fundamental requirements stay the same.
- The sub-brokership applicant must have at least passed the 10+2 exams. Many brokerage companies also ask for a graduate degree.
- Candidates seeking sub-brokerships must pass the NISM (National Institute of Securities Markets) examinations for stocks, commodities, futures, options, and mutual funds. The stock exchanges and SEBI have made this a requirement for sub-brokers.
- A sub-broker must possess a thorough understanding of the stock market to articulate the goods and services offered to clients. While a fundamental knowledge of market operations and brokerage fees is essential, substantial expertise or experience in the field is a valuable asset.
- Political, geopolitical, and economic factors have a significant impact on the stock market, making it important for anyone interested to stay current on these matters.
- Sub-brokers must be familiar with computers and technology because they will be assisting customers with trading terminals and market dealing.
- They also need to be effective communicators because a sub-main broker’s responsibility is to bring in new clients.
Working Capital Requirements
Most business owners are worried about this particular issue. Starting a sub-broker business entails expenses and startup capital, just like starting any other business. Here’s a list of the associated costs.
- Initial payment to the primary broker: Getting the licence to work as a sub-broker shall require an individual to make an initial deposit to the broker.
- Registration costs: To register with the broker or exchange a sub-broker needs to pay a fixed registration fee. That is a one-time expense as well.
- Costs associated with office setup: There will be expenses associated with finding an office space and setting it up. Money will be allocated for televisions, workstations, laptops, and other items.
How to Start a Sub-Broker Business
Step 1: Select Your Stock Brokerage Company
Selecting the stock brokerage company you want to work for is the first step. Making a decision about the sub-broker business model you’d like to use is crucial since it will affect many aspects of your daily operations, including incentives. In addition, the high incentives and assurance of growth give importance to networking, experience, digital presence, and product offerings of the brokerage business. With a number of such features for its sub-brokers in India, Share India stands out as a choice in this regard.
Step 2: Document Requirements and Eligibility
The following step is to review the eligibility requirements, which are rather straightforward. Send all the fully completed paperwork requested to the brokerage firm you are interested in working with. In addition to the required paperwork, interested parties or companies must additionally include a processing fee and GST. Here’s a list of essential documents you must submit along with your application form.
For proof of identity and address:
- Aadhaar card
- Voter Identity card
- Latest telephone bill
- Valid driving licence
- Passport
- Electricity bill
- Recent Bank statements
For proof of experience:
- This prerequisite is only necessary if an individual has less education than the HSC level.
- For the application to be accepted, such an applicant must show documentation of at least two years of experience working as an employee or dealer in the capital market in the name of an individual, a partner, or a director.
Step 3: Examining and Approving the Application
The stockbroker then pays the processing fee on your behalf and electronically submits your application to the National Stock Exchange for review and approval. The goal is to thoroughly examine your paper in case there are any errors or flaws. If so, the exchange would send your papers back for editing before submitting them.
Step 4: Registration With SEBI
After your application gets approved, you must register with the Securities and Exchange Board of India (SEBI). You will also have to pay the fee. Once SEBI has acknowledged your fee payment and registration, you will receive the sub-broker authorisation certificate and individual registration number. You are now officially recognised as a sub-broker.
Things to Consider for Becoming a Sub-Broker
Here are some crucial things every sub-broker should do to emerge successful in this competitive market.
- In order to become a sub-broker, you must first compile a list of people who are willing to help you with your entire trip. It may consist of your friends, relatives, admirers, followers, coworkers, and clients.
- You should plan to meet with your potential clients at least twice throughout the first year of operation. Without good meetings, attracting new clients and persuading them to do business with you can be quite difficult.
- Your present customers are what bring money into your company. But does that imply you need to cease making cold calls? A crucial part of a sub-broker business is cold calling. To keep your firm running, you may need to look for new clients.
Conclusion
Choosing a profession as a sub-broker may be rewarding and exciting. A thorough knowledge of the market and the items on offer is essential for being a successful sub-broker. Excellent customer service abilities and the capacity to manage complicated financial transactions are also crucial. To know more about sub-brokers, connect with Share India.
