If you searched "how to become a sub-broker in India" and landed on conflicting answers, here is the reason: the sub-broker no longer exists as a category you can register for. So the real question is not authorised person vs sub broker as two live options — it is understanding that one replaced the other. SEBI retired the sub-broker in 2019 and pushed everyone toward the Authorised Person (AP) route. With over 21 crore demat accounts in India as of end-2025, the demand for people who bring in and service clients has never been higher. This guide explains what changed, how the AP route actually works, what it costs, how you get paid, and how it compares with taking a salaried job at a broking firm.
Why the "sub-broker" route no longer exists
For years, the standard way to build a client-facing broking business without buying an exchange membership was to become a sub-broker. You registered with SEBI, attached yourself to a main broker, and earned a share of the brokerage your clients generated. That door is closed.
SEBI issued a circular on 3 August 2018, following a board decision on 21 June 2018, discontinuing the sub-broker as a category registered with the regulator. From that date, no new sub-broker registrations were granted. Anyone already registered had until 31 March 2019 to migrate to one of two roles: Authorised Person with a stock exchange, or Trading Member if they met the far heavier eligibility bar.
Sub-brokers who did nothing were deemed to have surrendered their SEBI registration on 31 March 2019. The intent was to simplify a crowded intermediary layer and move day-to-day registration from the regulator to the exchanges, which already handle the operational relationship with brokers. In practice, this means the phrase you should be searching for today is the Authorised Person, not the sub-broker.
If your longer goal is a full-time role rather than an agency arrangement, it is worth reading our companion piece on building a career as a stockbroker in India before you decide. And if you want the regulatory groundwork done properly rather than pieced together from forums, a structured NSE and NCFM certification exam preparation program covers the exams the exchanges expect you to clear.
What an Authorised Person actually is
An Authorised Person is an individual, partnership firm, LLP or body corporate appointed by a stock broker — a Trading Member of the exchange — to give clients access to the exchange trading platform. Crucially, you act as an agent of the broker, not as an independent operator. A Hindu Undivided Family (HUF) cannot be appointed as an AP.
The single most important distinction from the old model is who registers you. A sub-broker was registered with SEBI. An Authorised Person is registered with the stock exchange — NSE, BSE or another recognised exchange — and the application is submitted by your sponsoring broker, not by you directly. You are not registered with SEBI at all in this capacity.
That structure has consequences. Your compliance obligations flow through the broker, your client agreements sit under the broker's name, and your ability to operate depends on maintaining that relationship. The upside is a dramatically lower barrier to entry than a full membership; the trade-off is that you build on someone else's licence.
You can also be appointed by more than one broker across different exchanges or segments, subject to each exchange's rules and the terms of your agreements. What you cannot do is act independently of any broker: the whole model rests on being an extension of a registered Trading Member. That is why choosing the right broker at the start matters more than almost any other decision you will make as an Authorised Person — it defines your economics, your technology, and the segments you are allowed to touch.
One regulatory change moved you from a SEBI registration to an exchange registration
Source: SEBI circular, August 2018.
How to become an Authorised Person: the route in
The path is more administrative than academic, but each step matters. Here is the sequence most people follow.
- Choose your sponsoring broker. Because you register through a Trading Member, your first real decision is which broker to partner with. Compare their brokerage-sharing terms, technology, support, security-deposit demand and the segments they let you deal in.
- Clear the required certification exam. Exchanges expect an AP to hold the relevant certification for the segment they will service. In most cases that means passing the appropriate NISM certification — for example, NISM Series VIII for equity derivatives — which you sit externally with the certifying body. Solid exam preparation here removes the most common reason applications stall.
- Complete KYC and documentation. PAN, address proof, educational proof, photographs and the prescribed forms, all certified as the checklist requires.
- Broker files the application online. On NSE, the Trading Member applies through the ENIT portal — the process is fully online, with no physical submission of documents to the exchange.
- Sign the written agreement. You and the broker enter a written agreement prescribed by the exchange, covering scope of activity, responsibilities, confidentiality, commission-sharing and termination.
- Receive your AP registration and go live. Once the exchange registers you, you can begin sourcing and servicing clients under the broker's platform.
On cost, the exchange registration fee is modest — commonly around ₹5,000 plus GST — but individual brokers may ask for a refundable security deposit that varies widely. That deposit, not the exchange fee, is usually the real number to negotiate. The certification route mirrors what other registrations demand; if you are curious how a more advisory role is licensed, our breakdown of the SEBI RIA registration process shows a heavier, SEBI-direct alternative.
Stuck on which certification exam the AP route needs?
NIFM runs structured, bilingual (Hindi and English) exam-preparation modules for the SEBI and NISM certification series, with practice tests and mentor support — so you clear the exam the exchange expects before you apply.
Explore the SEBI and NISM certification exam preparation →Authorised Person vs sub-broker vs a salaried broking job
Since the sub-broker column is now historical, the live comparison that matters is Authorised Person against a salaried job at a broking firm. The table below keeps the retired sub-broker in view so the shift is clear, then contrasts the two routes actually open to you today.
| Factor | Sub-Broker (retired) | Authorised Person (today) | Salaried broking job |
|---|---|---|---|
| Registers you | SEBI (discontinued) | Stock exchange, via your broker | No personal registration; you are an employee |
| Upfront cost | SEBI registration fee | ₹5,000 + GST exchange fee, plus a broker deposit | ₹0 — the firm bears it |
| Who pays you | Main broker (revenue share) | The broker only — you cannot charge clients directly | The employer (fixed salary) |
| Income model | Commission share | Variable — a share of brokerage on your clients | Predictable — salary, sometimes plus incentive |
| Autonomy | Moderate | High — you run your own client book | Low — you follow the desk |
| Best for | — | Self-starters with a network who want ownership | Those who want stability and structured learning first |
Neither route is "better" in the abstract. The salaried job trades ceiling for certainty; the AP route trades certainty for ownership and a much higher ceiling if you can build a book. Many people do the salaried job first, learn the trade, then move to the AP model once they have relationships to bring with them.
The earnings model — and the mistakes that sink new APs
Understand the money before you commit. As an Authorised Person you may receive remuneration — fees, commission or charges — only from the stock broker, and you cannot charge clients directly. The broker collects brokerage from your clients and shares an agreed proportion with you.
That proportion is negotiated, not fixed by regulation. Across the industry it commonly sits somewhere around 60:40 or 70:30 in the AP's favour, depending on the broker, the segment and the volume you generate. The visual below shows an illustrative 70:30 split so you can see the shape of the deal — treat any specific ratio as a starting point for negotiation, not a promise.
On an illustrative 70:30 arrangement, you keep the larger share of the brokerage
Source: industry practice as described by NSE and leading brokers, 2025.
The common mistakes are predictable and avoidable:
- Chasing the highest share, ignoring the deposit. A 75% share behind a large, poorly-refundable security deposit can be worse than a 65% share with none.
- Treating it as passive income. Your earnings track the trading activity of clients you must find, onboard and keep. No book, no income.
- Skipping the certification prep. Applications stall when the required NISM certification is not in place; prepare and clear it before your broker files.
- Blurring the advice line. An AP facilitates access and service; giving specific buy or sell recommendations strays into territory that needs a separate SEBI investment-adviser registration.
- Not reading the termination clause. Because you build on the broker's licence, an abrupt termination can freeze your client relationships. Know the exit terms before you sign.
Which route is right for you
If you have a network — a circle of investors, a local community, a base of existing clients from a related field — and you want to own the upside, the Authorised Person route is the modern, low-barrier way in. If you are early in your journey and want to learn the craft with a monthly cheque behind you, a salaried broking role is the safer first move, and nothing stops you converting to an AP later.
Whichever you choose, the gate is the same: the certification the exchanges and brokers expect. That is where a focused preparation path pays for itself. If you are still weighing which qualification carries the most weight, see how NCFM, NISM and CFA compare on career value before you invest your time.
Clear the certification, then choose your broking route
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Start the NSE and NCFM exam preparationFrequently Asked Questions
Is a sub-broker the same as an authorised person?
Not quite. They played a similar client-facing role, but the sub-broker was a SEBI-registered category that was discontinued in 2019. The Authorised Person is its successor, registered with the stock exchange through a broker rather than with SEBI. If you read "sub-broker" in current material, mentally translate it to Authorised Person.
Can I still register as a sub-broker in India?
No. SEBI stopped granting new sub-broker registrations after its August 2018 circular, and existing sub-brokers had to migrate to Authorised Person or Trading Member by 31 March 2019. The only comparable route open today is the Authorised Person.
Do I need a NISM certification to become an authorised person?
In most cases, yes. Exchanges expect an AP to hold the certification relevant to the segment they will service, which usually means passing the appropriate NISM certification exam — sat externally with the certifying body. Preparing for and clearing it before your broker files the application avoids the most common delay.
How much does it cost to become an authorised person?
The exchange registration fee is commonly around ₹5,000 plus GST. Beyond that, individual brokers may require a refundable security deposit that varies widely, so the total upfront cost depends more on the broker you choose than on the exchange fee.
How does an authorised person earn money?
An AP earns a share of the brokerage generated by the clients they bring in and service. Payment comes only from the broker — an AP cannot charge clients directly — and the split is negotiated, commonly somewhere around 60:40 to 70:30 in the AP's favour depending on the broker and volumes.
Disclaimer: This article is for educational purposes only and does not constitute investment advice. Markets carry risk — please do your own research or consult a qualified financial professional before investing. NIFM provides training and exam preparation; certification exams conducted by regulatory or professional bodies are administered by those bodies independently.
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