Authorised person vs sub broker: what's the difference?

What was a sub broker?

A sub broker was a person or firm that acted on behalf of a SEBI-registered stock broker to bring in clients and help them trade. Sub brokers held their own SEBI registration, which meant two layers of registration for a similar role: authorised persons (approved by exchanges) and sub brokers (registered with SEBI). SEBI considered this duplication unnecessary.

Why SEBI merged sub brokers into authorised persons

• One clear category: both roles did largely the same work, so one framework was simpler to supervise.
• Clear accountability: under the AP model the stock broker is responsible for its authorised persons' activities, which keeps client protection with the regulated broker.
• Less paperwork: partners no longer need a separate SEBI registration; the broker applies to the exchange for approval.

Sub brokers who wanted to continue had to become authorised persons, or register as trading members themselves.

Authorised person vs sub broker at a glance

What an authorised person can and cannot do

An AP can introduce clients, help with account opening, explain products, and in many cases offer a branch or office where clients get support, all on behalf of one stock broker per exchange segment. An AP cannot accept client money or securities in its own name, issue its own contract notes, or give investment advice unless separately registered for that (for example as a SEBI investment adviser). The broker remains responsible for the AP's conduct, so it sets rules on marketing, record keeping and compliance.

Authorised person vs forex introducing broker

An AP is India's version of the introducing role for the stock market. Internationally, the same role in forex and CFDs is called an introducing broker (IB). The ideas are similar (introduce clients, earn a share of revenue, never hold client money), but the rules differ by country. For Indian residents, forex is only permitted in specific pairs on recognised Indian exchanges; see our guide to forex rules in India.

Is becoming an AP right for you?

• You already have an audience or a local network of investors.
• You are comfortable with compliance: KYC support, record keeping and honest marketing.
• You can compare partner agreements on revenue share, payout timing, support and termination terms. Our guide on how AP revenue sharing works explains the details.

Ready for the steps? Read how to become an authorised person in India.

This guide is general information, not legal advice. Exchange and SEBI rules change, so check current circulars before you apply.

How the AP model works day to day

In practice, an authorised person works as the broker's local face. A typical week looks like this:

• Finding clients: through referrals, a local office, seminars, or online content that follows the broker's marketing rules.
• Account opening: helping clients complete digital KYC (PAN, Aadhaar-based e-sign, bank verification and in-person verification where needed) on the broker's own platform.
• Ongoing support: answering questions about the platform, contract notes, margin and charges, and passing complaints to the broker's support or grievance team.
• Records: keeping records the broker asks for, because exchanges inspect brokers and their authorised persons.

Client money always moves between the client's own bank account and the broker. If anyone asks you, as a partner, to collect cash or take payments into your account, that is a serious red flag.

Common myths about sub brokers and APs

• "An AP is a mini broker." No. The AP acts on behalf of the broker; the broker holds the membership, the client accounts and the responsibility.
• "Any broker partner can give tips." No. Advice and research need separate SEBI registration as an investment adviser or research analyst.
• "Revenue share is passive income forever." No. You earn only while your clients actively trade, and the agreement can end.

Frequently asked questions

Do sub brokers still exist in India?

Not as a SEBI registration category. People still say "sub broker" in conversation and in broker marketing, but the legal role today is authorised person.

Does an authorised person need SEBI registration?

No separate SEBI registration is needed. The stock broker applies to the stock exchange, which approves the authorised person for specific segments.

Can an authorised person work with more than one broker?

Exchange rules generally limit an AP to one broker per exchange segment. Check the current rules of each exchange before signing.