Roles And Functions of Sub-Brokers
- 13th August 2025
- 10:15:00 AM
- 4 min read
There is a lot of terminology you could hear when you first enter the stock market. A sub-broker is one of them. However, what is a sub-broker in reality? What are their functions and roles? The number of brokers has also decreased by 40% in April and December 2024. As a result, some of them become sub-brokers (now known as Authorised Persons).
This blog provides a comprehensive guide on the roles and functions of sub-brokers and the benefits they can offer to investors.
An Overview of Sub-Brokers in the Stock Market
No individuals are permitted to invest directly in stocks and shares. Sub-brokers and broking firms are in charge of it. If you want to invest in the capital market, you may need the help of a sub-broker, an expert who can help you navigate the stock market.
However, in 2018, the Securities and Exchange Board of India (SEBI) stopped registering sub-brokers. All current sub-brokers were required to be ‘Authorised Persons’ as of 2019. Let us understand the roles and functions of sub-brokers in India.
Roles and Functions of Sub-Brokers
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Client Acquisition
Sub-brokers actively seek customers through promotion, networking, and referrals. They also provide education on stock market investing through webinars, workshops, or seminars.
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Service Offerings
They support clients by offering services like stock trading, investment strategies, and analysing market trends. They also offer recommendations on the financial goals and risk tolerance of clients.
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Order Placement
The roles of sub-brokers also include managing clients’ order placements, forwarding them to the stock exchange or platform of the primary broker. They also keep an eye on the trade execution and notify clients about their transaction status.
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Account Maintenance
Sub-brokers help customers keep their trading and Demat accounts up to date by changing their contact details, preferences, and personal data. They guarantee the accuracy and timeliness of all account-related documentation.
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Research and Analysis
Sub-brokers also carry out research on different financial instruments and markets. Based on their research, they suggest the type of investments and assist customers in making wise decisions.
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Compliance
The functions of sub-brokers also include complying with the regulatory requirements set by the financial authorities. This helps them ensure ethical trading practices among clients.
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Relationship Management
Sub-brokers or Authorised Persons also ensure strong relationships with clients and maintain long-term engagement. These include gathering client feedback for improving their services.
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Risk Assessment
Sub-brokers assess customers’ financial goals and investment horizons to determine their risk tolerance. They also recommend suitable investment plans like mutual funds or equities.
Advantages of Using Sub-Brokers for Investors
As you are aware of the roles and functions of sub-brokers in the Indian market, you must know what benefits you can get while using sub-brokers:
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Seamless Access
If you cannot access a stockbroker to open a Demat account or other services, a sub-broker will help to do so by acting as an intermediary between you and a broker.
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Getting Investment Suggestions
To invest successfully and optimise your return on investment, sub-brokers are essential in helping you make well-informed investment decisions.
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Receiving Market News
As part of the broking firm, they get marketing news and assistance through seminars and training, which they then share with you.
Final Thought
In the world of investing, sub-brokers are essential as they serve as a conduit between stockbrokers and investors. The roles and functions of sub-brokers include client acquisition, service offerings, account maintenance, adhering to compliance, and more.
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Frequently Asked Questions
1. Does a sub-broker need to have a SEBI registration?
No, in 2018, SEBI stopped the registration of sub-brokers. From 2019, sub-brokers need to be registered as Authorised Persons by the stock exchanges Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).
2. Can a sub-broker collaborate with more than one stockbroker?
No, only one stockbroker may be associated with a sub-broker or Authorised Person following SEBI laws and stock exchange standards.
3. Can a sub-broker make trades for investors?
Yes, a sub-broker makes trades for investors using their strategies on their behalf.
4. How Can a Sub-Broker Make Money?
A sub-broker makes money by getting a share of the revenue from a brokerage firm.
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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
