Ever since the lockdown, more and more people have realised that the key to acquiring a great amount of wealth is to invest in assets. One of the types of assets that will help you along the way is stocks. To invest in stocks, it is imperative to have a Demat account. A stock brokering firm that is registered with the Securities and Exchange Board of India (SEBI), will help you get a Demat account and handle your future transactions with the stock market on your behalf.
Even though there are several numbers of brokers in India, the demand to invest in the stock market is skyrocketing. To serve every enthusiastic investor, the concept of sub-broker was introduced. To become a sub-broker, you have to undergo a series of steps. Once you complete these steps, you will have the authority to provide more personalised attention and help people achieve their investment goals.
How you Can Become a Sub-broker?
A sub-broker will act as an intermediary between the Trading Member (the stockbroking firm) and the investor. Here’s how you can become a sub-broker.
Choose the Right Sub-broking Franchise
Various stockbroking firms encourage enthusiastic individuals to choose sub-broking as a career path. The firms develop a business model to handsomely reward sub-brokers for their time and effort. But the model differs from firm to firm and thus it is important to examine all available models and choose the one that suits your needs.
Eligibility Criteria
After you have chosen a model that meets your preferences, check the eligibility criteria set down by the broking firm for becoming a sub-broker at their firm. Some of the common criteria are related to your age, education, financial record, and awareness of the stock market and international markets.
Documentation
When you are confident about meeting all the criteria, you have to register yourself with SEBI as a sub-broking. This will be done when you submit the required set of documents to your stockbroking firm. The firm may take a processing fee for preparing the documentation set and forwarding the application form. This form will then be forwarded to SEBI for scrutinization.
Verification
SEBI will now thoroughly check your documents to ensure that you meet the eligibility criteria and that you are suitable to operate as a sub-broker with the firm of your choice. If any issues are found, the application form will be returned to the stockbroking firm and you may have to perform the documentation part again.
SEBI Registration Fees
Once SEBI approves your application form, you need to pay a fee to SEBI to initiate your registration as a sub-broker. You will hand over the fees to the stockbroker acting on your behalf, and the stockbroker will forward your fee amount to SEBI. This step ensures compliance with the SEBI regulations and your registration as a sub-broker.
Sub-broker Certificate
Once your fee is processed, you will receive a receipt of payment from SEBI. Soon after, SEBI will issue you a certificate. This certificate will recognise you as a sub-broker and you will now have the authority to operate in the Indian stock market.
Additional Help
Acquiring deep knowledge of the financial industry, understanding market trends, and following the set of regulations will be of great help. You can also increase your chances of meeting the educational criteria by enrolling on certified courses. Gathering experience by actively participating in training programs will help you stand out from the crowd. The most important skill you must focus on improving is the art of communication. Good communication will help you foster connections and establish a healthy relationship with your potential clients.
The steps to becoming a sub-broker may seem long, but becoming a sub-broker has various benefits.
- Financial Knowledge
Becoming a sub-broking will help you experience the ever-changing and fast-paced world of investment and trading. From having the opportunity to learn from precise data to understanding the decision process behind making a single trade, you will have the chance to learn it all. All this knowledge will help you to make informed decisions when you invest via a share market app to get a taste of wealth creation.
- The Exponential Commissions
From the above steps, it is clear that only a small amount of investment is required to become a sub-broker. But the returns on your investment are exponential. As the number of clients brought in by you increases, the total sum of commission based on the client’s transactions will increase. Furthermore, as the number of transactions done by each client increases, the commission will increase yet again.
Conclusion
A sub-broker acts as the middle-man between the huge broking firms and investors. The process of becoming a sub-broker may seem daunting, but they are extremely rewarding in the long run. To get the desired outcome, you must choose the right sub-broking franchise model, pass through all the criteria, submit the right documents, and invest a small amount towards learning and registration fees.
