5 Steps To Become A Stock Broker In India in 2021

What is a Stock Broker?

Stock broker is basically an investment broker. Their job is to execute orders on behalf of their customer or client, their clients are mostly traders. They could also provide trading advise to their clients. To Become Stock broker in India , one needs to qualify this NISM exam and also should have at least 2 years of experience working as a sub broker.

Nism Certification is very important if you want to be a Stock broker or pursue career in Indian Stock Market.

Step #1: Apply For Registration with SEBI

As we all know Equity market is regulated by SEBI. So, it is very important to seek SEBI’s approval. After completion of registration process with SEBI, they will give you certificate of registration. It is mandatory if you want to become Stock broker in india.

Step #2: Setup Your Office

After registration process is done, SEBI will assign an Compliance officer who will check your eligibility by checking your office and will also verify whether you have all the necessary equipment and manpower to run this business efficiently only then you will be approved. So make sure to setup your office and you should have all the necessary equipment.

Step #3: Take Membership In Stock Exchange

After that you need to seek approval and take membership in Stock Exchanges like NSE and BSE. To get membership there you need to pay membership fees and also have to submit security deposits. This is also mandatory if someone wants to become Stock broker in India.

Step #4: Take Membership In Depository

Here as well one has to pay Membership fees to depository to seek membership and also have to pay security deposits. So, To become Stock Broker in India one has to do lots of registration and paperwork and also need decent capital to run this business efficiently.

Step #5: Maintain Client Details And Create Trading Software

Stock Broker also have to maintain customer’s details and ledger and many other compliance. They also have to appoint Compliance officer who took care of compliance related activities. SEBI made Certification compulsory for Compliance Officer.

In Today’s competitive world , Stock broker also have to create trading software and mobile app to attract traders and customers. So, one needs lots of capital to run this business successfully.

One also need two year work experience under stock broking firms. For work experience apply to list of share brokers in your city, contact them and ask for job vacancies. Work first in small companies, after getting job only focus on learning and gaining experience.

You should be at least 21 years of age to become Stock Broker. But the minimum age to become Sub broker or Authorized person is 18. If you don’t have much capital or under 21 or don’t have 2 years working experience, then you can become Sub broker or Authorized person.

What Is A Sub Broker ?

Sub Broker works on behalf of their Stock Broker. To scale their Business, Brokers appoint Sub brokers. Just like McDonald, have franchise to scale their business. Similarly, a Stock Broker can also appoint Sub broker as a franchise.

One can apply at main Stock broker’s office for franchise. then a manager will visit you site if he likes it then they will approve you.

They may provide you their banners and forms to setup in your office. To become Sub broker some brokers may ask you to give security money. And after becoming sub broker you can get security money back but not registration fees.

What Is An Authorized Person?

In 2009, SEBI come up with a concept of Authorized person. To become an Authorized person of any stock broker, you only need to do registration with Stock Exchange.

There is no major difference between Sub broker or Authorized person, only difference is that Authorized person doesn’t have to do registration with SEBI. So, they don’t need to worry about having an office or manpower and necessary equipment to run their business. You get all these facilities from your Stock Broker.

To become Authorized person you need to be at least 18 year old and need basic verification documents like Aadhaar card, Pan card, etc.

After becoming Authorized person or Sub broker , the amount of money you earn will depend on the amount of account you have open for your Stock broker, then your Stock broker will share some brokerage charge with you.

But now SEBI preferred Authorized person over Sub broker, So Authorized person is best option for now.

Anything I Missed?

And now I’d like to hear from you:

Or maybe you have a question.

Either way, let me know by leaving a comment below right now.


4 thoughts on “5 Steps To Become A Stock Broker In India in 2021”

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