If you’ve spent any time researching how to build a career around the stock market without becoming a licensed broker yourself, you’ve probably come across the term “Sub Broker” — and then, confusingly, “Authorised Person” used almost interchangeably.
The confusion is understandable, because this entire category has been restructured over the past few years, and much of the online content still hasn’t caught up.
This guide clears things up properly: what an Authorised Person (AP) actually is today, why the term “sub-broker” is technically outdated, exactly what it costs to get started, how the registration process works, and — most practically — how AP commission and revenue sharing actually function, so you can realistically assess whether this is a business worth building.
Sub Broker vs Authorized Person — Why the Terminology Changed
If you’re reading older content, you’ll see “sub broker” used as the standard term for someone who brings clients to a stockbroker in exchange for a share of the brokerage. That term is now largely outdated in a formal, regulatory sense.
Here’s what actually changed: SEBI introduced the unified Authorised Person (AP) category in 2018, and has since instructed stock exchanges to stop issuing new sub-broker registrations entirely — any pending sub-broker applications were returned to applicants, and existing sub-brokers were migrated into the AP framework.
The key structural difference:
| Aspect | Old Sub-Broker Model | Current Authorised Person (AP) Model |
| Registered With | SEBI directly | The relevant stock exchange (NSE/BSE/MCX), not SEBI directly |
| New Registrations | Discontinued since 2018 | This is the current, active framework |
| Legal Definition | Independent intermediary registered with SEBI | Agent appointed by a stockbroker, providing access to the broker’s trading platform |
| Broker’s Liability | Less clearly defined | All acts of the AP are deemed to be those of the appointing broker |
SEBI’s official definition of an Authorised Person is: “an individual, partnership firm, LLP or body corporate who is appointed as such by a stockbroker (including trading member) and who provides access to a trading platform of a stock exchange as an agent of the stockbroker.”
In everyday usage, people still commonly say “sub-broker” — including in casual searches and conversations — but the actual, current registration category you’ll be applying for is Authorised Person.
What Does an Authorised Person Actually Do?
In practical terms, an AP acts as a local representative and business-generating agent for a stockbroker. Day-to-day responsibilities typically include:
- Client acquisition — bringing new investors and traders to open demat and trading accounts with your partner broker.
- Client servicing — helping clients with account-related queries, basic platform guidance, and ongoing relationship management.
- Generating trading volume — since your income is tied to the brokerage your clients generate, part of the role naturally involves encouraging active, engaged usage of the platform (within regulatory and ethical bounds).
- Basic compliance support — helping clients navigate KYC, documentation, and onboarding requirements.
Unlike a fully licensed stockbroker, an AP does not hold independent exchange membership or trade on their own account under this registration — you operate entirely as an extension of your partner broker’s business, using their trading infrastructure and regulatory registration.
Eligibility Criteria — Who Can Register as a Sub Broker?
Current eligibility requirements are relatively accessible, though SEBI has proposed tightening them (more on this in Section 7):
- Eligible entity types: Individuals, partnership firms, LLPs, and body corporates can all apply. HUFs (Hindu Undivided Families) are not eligible.
- Educational qualification: Currently, there’s no strict, uniformly mandated educational requirement, though many brokers prefer candidates with at least a basic understanding of financial markets.
- NISM certification: Not always mandatory today, but increasingly recommended — and several brokers already require it as an internal condition of partnership, even where SEBI hasn’t yet made it a universal rule.
- Basic documentation: PAN, Aadhaar, address proof, and (for entities) business registration documents, partnership deed, or LLP agreement, as applicable.
A proposed change to watch: SEBI has been reviewing tighter eligibility norms, potentially requiring APs to be graduates with at least 3 years of stock market experience, or, alternatively, 10th-standard pass with at least 10 years of relevant experience.
As of this writing, this remains under SEBI review and has not been finalised into binding regulation — but it signals the direction eligibility requirements are heading.
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Sub Brokership Costs Involved — Registration Fee & Security Deposit
Becoming an AP involves two distinct cost components:
| Cost Component | Typical Range | Paid To |
| Exchange Registration Fee | Approx. Rs 5,000 + GST | Stock exchange (via your partner broker) |
| Security Deposit | Rs 50,000 – Rs 3,00,000 (varies by broker) | Your partner broker |
| Total Estimated Starting Capital | Rs 50,000 – Rs 10,00,000 | Combined, depending on broker scale and partnership tier |
The security deposit varies enormously based on which broker you partner with, the scale of business you intend to build, and whether you’re applying as an individual or a larger corporate entity.
Discount brokers with high-volume, low-touch partnership models often require lower deposits than full-service brokers offering more comprehensive back-office and research support.
It’s worth directly comparing deposit and fee structures across a few brokers before committing — our broker comparison guide covers some of the platforms that also run AP/partner programs, though it’s worth reaching out to each broker’s partnership desk directly for exact current terms.
Step-by-Step Sub Broker Registration Process
1. Choose a stockbroker offering an AP/partner program — compare revenue-sharing models, technology, brand reputation, and back-office support before committing.
2. Fill out the AP application form, provided by your chosen broker, including personal details (name, address, PAN, Aadhaar) and business entity documents if applying as a firm, LLP, or company.
3. Complete any broker-specific NISM certification requirement, if applicable — even where not strictly mandatory yet, having this certification can strengthen your application and credibility.
4. Submit required documents, including identity proof, address proof, educational certificates, bank account details, and entity registration documents where relevant.
5. Pay the registration fee and security deposit as specified by your broker.
6. Your broker submits your AP registration to the relevant exchange (NSE, BSE, and/or MCX, depending on which segments you’ll operate in) for approval.
7. Once approved, you receive your AP registration/code and can begin onboarding clients and generating business under your partner broker’s platform.
How Sub Broker Revenue Sharing & Commission Actually Works
This is the part most prospective APs care about most, and it’s genuinely broker-dependent rather than governed by a single, fixed formula:
- Revenue sharing model: Most APs earn a percentage share of the brokerage generated by the clients they bring in and service — commonly ranging from roughly 30% to 70% of the brokerage revenue, depending on the broker, your negotiated partnership tier, and the volume of business you generate.
- Referral fees: Separately, some brokers offer a one-time referral fee for each new client onboarded, distinct from the ongoing revenue-sharing arrangement.
- No industry-wide cap (currently): As of now, only NSE has issued a circular addressing referral fee capping; BSE and MCX have not put similar restrictions in place — though this is an area SEBI’s ongoing 2026 review is expected to address more comprehensively, with some industry voices proposing no cap on referral amounts at all.
- Higher volume, better terms: APs who generate significant, sustained trading volume for their partner broker can often negotiate a higher revenue-sharing percentage over time — this isn’t typically a fixed rate offered uniformly to every AP regardless of scale.
A crucial point to understand before committing: your income is directly tied to your clients’ trading activity, not a fixed salary.
This means your earnings will genuinely fluctuate based on market conditions, client engagement, and how actively your client base trades — a quiet market or a period of reduced client activity directly and immediately affects your income.
SEBI’s 2026 Regulatory Overhaul — What’s Changing
SEBI notified the SEBI (Stock Brokers) Regulations, 2026 on January 7, 2026, replacing the older 1992 framework entirely — a consolidated rulebook covering registration, governance, conduct, and compliance for stockbrokers and clearing members, which indirectly affects the AP ecosystem operating under them.
Specific to Authorized Persons, SEBI has been separately reviewing several proposed changes:
| Criteria | Current Requirement | Proposed (Under SEBI Review, 2026) |
| Entity Types Eligible | Individuals, partnership firms, LLPs, body corporates (HUFs not eligible) | No change expected |
| Educational Qualification | No strict uniform requirement | Graduate + 3 years market experience, OR 10th pass + 10 years experience |
| NISM Certification | Broker-discretionary; not universally mandatory | May become uniformly mandatory |
| Documentation | PAN, Aadhaar, address proof, entity registration docs (if applicable) | Expected to remain similar, with added due diligence by brokers |
None of these is finalised as binding regulation as of this writing — they remain under SEBI’s active review and discussion. However, the clear direction is toward a more structured, qualification-based, and compliance-heavy AP ecosystem than existed even a few years ago.
If you’re planning to enter this business, it’s worth building your practice with these tightening standards in mind from the outset, rather than assuming today’s relatively accessible entry requirements will remain unchanged indefinitely.
How Much Can You Realistically Earn as a Sub Broker?
There’s no fixed income for an AP — it depends entirely on your client base’s trading volume and your negotiated revenue-sharing percentage. Here’s an illustrative framework:
| Monthly Brokerage Generated by Clients | Assumed Revenue Share | Approx. Monthly Income (Rs) |
| Rs 50,000 | 50% | 25,000 |
| Rs 1,00,000 | 50% | 50,000 |
| Rs 2,50,000 | 50% | 1,25,000 |
| Rs 5,00,000 | 50% | 2,50,000 |
The realistic path to meaningful income involves steadily building a genuinely active client base over time — a handful of clients trading occasionally will generate modest income, while a larger base of consistently active traders and investors can compound into a substantial, scalable business.
This is broadly similar in structure to the Mutual Fund Distributor model, where income also builds gradually and compounds with client retention and activity, rather than paying out large amounts immediately.
Choosing the Right Broker to Partner With
A few factors genuinely matter when selecting which broker to become an AP for:
- Revenue-sharing percentage and transparency — understand exactly how your share is calculated and when it’s paid out.
- Technology and platform reliability — your clients’ experience directly reflects on you, so partnering with a broker offering a stable, well-regarded trading platform matters. Our stock broker reviews cover platform quality in detail.
- Back-office and onboarding support — brokers offering strong AP-facing support tools (client onboarding dashboards, marketing materials, dedicated relationship managers) can meaningfully ease your day-to-day operations.
- Security deposit and fee structure — weigh the upfront cost against the broker’s revenue-sharing terms and support quality, not just the lowest deposit requirement.
- Segments supported — confirm whether the partnership covers equity, F&O, and commodity segments (including MCX commodity trading) if you intend to serve clients across multiple asset classes.
Risks & Responsibilities Every AP Should Understand
- Your income is variable, not guaranteed — it rises and falls with client trading activity and broader market conditions.
- You bear reputational risk — since all your acts are deemed those of your appointing broker, any compliance lapses or client complaints reflect on both you and your broker relationship.
- You’re not an independent licensed entity — you operate under your broker’s registration, which means your business is inherently tied to that broker’s continued good standing and platform.
- Regulatory requirements are tightening — as covered in Section 7, staying ahead of proposed qualification and certification requirements protects your long-term ability to operate in this space.
- Ethical client servicing matters more than short-term volume — since your income is tied to brokerage generated, there’s an inherent temptation to encourage excessive trading; APs who prioritise genuine client outcomes over short-term commission tend to build more sustainable, referral-driven businesses over time.
FAQs related to Sub Broker Registration Process
Here are FAQs on Sub Broker Registration.
Is “sub-broker” still a valid registration category in India?
No, not for new registrations. SEBI discontinued new sub-broker registrations in 2018 and unified this category under “Authorised Person” (AP), registered with the relevant stock exchange rather than directly with SEBI.
The term “sub-broker” is still commonly used informally, but the current, active registration is the AP framework.
How much money do I need to become an Authorised Person?
Total starting costs typically range from approximately ₹50,000 to ₹10,00,000, combining the exchange registration fee (around ₹5,000 + GST) and a broker-determined security deposit (commonly ₹50,000–₹3,00,000), depending on which broker you partner with and the scale of the partnership.
Do I need NISM certification to become a Sub Broker?
Not universally mandatory today, though many brokers already require it as an internal condition, and it’s increasingly seen as a strong credential. SEBI’s ongoing 2026 review may make it a uniform requirement going forward.
How is AP commission calculated?
Most APs earn a percentage share (commonly 30%-70%) of the brokerage generated by their clients’ trading activity, negotiated with their partner broker.
Some brokers additionally offer one-time referral fees for new client onboarding, separate from ongoing revenue sharing.
Can a company or LLP become an Authorised Person, or only individuals?
Individuals, partnership firms, LLPs, and body corporates can all apply to become an AP. HUFs (Hindu Undivided Families) are not eligible under current rules.
Is becoming an AP a good career choice in 2026?
It can be, particularly for those comfortable building income gradually through client relationships rather than earning a fixed salary.
However, given SEBI’s proposed tightening of eligibility and compliance requirements, entering with proper certification and a clear understanding of your responsibilities will likely serve you better long-term than treating it as a low-effort side income.
What happens if my broker’s registration is suspended or revoked?
Since an AP operates entirely under their appointing broker’s exchange registration, any suspension or revocation of the broker’s own registration would directly affect your ability to continue operating as their AP — this is a structural dependency worth factoring into your choice of broker partner.
Final Thoughts
Becoming an Authorized Person remains one of the more accessible ways to build a business around India’s growing retail investing base — but it’s genuinely evolving into a more structured, compliance-conscious profession than the old “sub-broker” model many people still picture.
Understanding the correct current terminology, realistic costs, and how revenue sharing actually works will help you evaluate broker partnerships with clarity, rather than relying on outdated assumptions still floating around online.
If you’re serious about this path, start by comparing partnership terms across a few established brokers, consider completing relevant NISM certification even where not yet mandatory, and build your practice with SEBI’s tightening regulatory direction in mind from day one.
Disclaimer: This article is for general educational purposes and reflects SEBI/exchange regulations as understood at the time of writing, including proposed changes still under SEBI review.
Registration requirements, fees, and revenue-sharing norms vary by broker and are revised periodically — always confirm current terms directly with your chosen broker and the relevant exchange.