Authorised Person vs Sub Broker
- 11th August 2025
- 06:00:00 PM
- 6 min read
Want to enter the world of stockbroking but do not have sufficient funds? Well, you can become an Authorised Person by paying a low initial cost. However, several people who want to start this profession are confused about the Authorised Person and sub-brokers. This blog clears your confusion by providing a difference between sub-broker vs Authorised Person.
Who is a Sub-Broker?
A sub-broker in the Indian stock market is a person or an entity that acts as an intermediary between investors and registered stockbrokers. However, SEBI discontinued the fresh sub-broker registration from 2018.
They are registered with stockbrokers but are not directly linked with the Securities and Exchange Board of India (SEBI). The primary responsibilities of a sub-broker are:
- Offering investment advice to investors and encouraging them to invest more.
- Help clients trade securities on their behalf.
- extending the network of stockbrokers.
Who is an Authorised Person?
Authorised Persons are similar to sub-brokers, as they help facilitate trading and provide investing services on behalf of a stockbroker. From 2019, all the remaining sub-brokers were mandated to be an ‘Authorised Person’. These Authorised Persons can be individuals or organisations appointed by stockbrokers.
The key responsibilities of an Authorised Person are:
- Order placement on behalf of investors
- Attracting clients to stockbrokers
- Offering financial advice to customers
- Keeping records of transactions
Authorised Person vs Sub-Broker – Key Differences
Although both sub-brokers and Authorised Persons have similar responsibilities, there are a few differences between them. The table below provides a difference between sub-broker vs Authorised Person:
| Parameters | Sub-broker | Authorised Person |
| Registration | Sub-brokers are registered under the stockbrokers and are not directly registered with the SEBI. | Authorised Persons need to be registered with the concerned exchange. |
| Current Status | Discontinued by SEBI in 2018 | Active and permitted |
| Services Offered | Client acquisition, financial guidance, and carrying out transactions on behalf of clients. | Placing trade orders, client acquisition, record keeping, customer service, and financial guidance. |
| Communication with Clients | Directly communicate with clients and act as mediators between stockbrokers and clients. | Communicate with clients, but with some parameters for stockbrokers and trading members. |
| Market access | Sub-brokers can only access the cash market. | Authorised Persons can access all segments, including equities and derivatives. |
For more financial advice, you can download the PL Capital Group – Prabhudas Lilladher application and start trading today!
Advantages and Disadvantages of Becoming an Authorised Person
After learning the difference between sub-broker vs Authorised Person, you must understand the following advantages and disadvantages of an Authorised Person:
Advantages
- You can have access to the research reports of the stockbrokers and can receive market news very early.
- You may also earn commissions along with the profit from the investment.
- Using your knowledge of the best tools, you can find better investment opportunities.
Disadvantages
- Being an Authorised Person, you have to bear the risk and responsibility of your trading choices and the losses.
- If your trades are based on insider information or recommendations that are unavailable to the public, you may face legal issues.
Advantages and Disadvantages of Becoming a Sub-Broker
Understanding the following advantages and disadvantages of a sub-broker is crucial when looking for sub-broker vs Authorised Person:
Advantages
- Sub-brokers have good earning potential since they can charge commission from the brokers. The more investors trade with the brokers, the more commission a sub-broker can earn.
- As a sub-broker, you may have flexibility and freedom in your tasks. You can make your schedules and use your skills in your work.
Disadvantages
- Due to the increased competition in the market, sub-brokers can face significant challenges in acquiring new clients.
- Being a sub-broker, your commission income may be affected in times of market volatility. You may earn less during recessions when most of the investors stop trading.
Final Thought
Based on the difference between sub-broker vs Authorised Person, a sub-broker can directly communicate with clients and act as a mediator between them and the brokers. Contrarily, Authorised Persons communicate with clients while maintaining a few parameters from stockbrokers and trading members.
If you want to become an Authorised Person, you can download the PL Capital application and partner with them. PL works with more than 2,000 Authorised Persons like you.
Frequently Asked Questions
1. Who can become a sub-broker?
Anyone aged over 21 can become an Authorised Person (previously known as a sub-broker) by following some eligibility criteria. They must have a minimum qualification of 10+2, basic knowledge of the stock market, and experience in the finance sector.
2. What are the 2 main differences that set apart agents and brokers?
The 2 main differences that distinguish agents and brokers lie in the roles and regulatory status. Stockbrokers are directly registered with the SEBI, and agents are registered under the broker. In addition, stockbrokers are responsible for managing the overall client portfolio and have direct market access. Contrarily, agents do not have direct market access.
3. What are the benefits of becoming a sub-broker?
Becoming an Authorised Person (previously known as a sub-broker), you can enter the world of the stock market with a low initial investment, have good earning potential, and have flexibility and freedom in your tasks.
The 2 main differences that distinguish agents and brokers lie in the roles and regulatory status. Stockbrokers are directly registered with the SEBI, and agents are registered under the broker. In addition, stockbrokers are responsible for managing the overall client portfolio and have direct market access. Contrarily, agents do not have direct market access.
4. What are the benefits of becoming a sub-broker?
Becoming an Authorised Person (previously known as a sub-broker), you can enter the world of the stock market with a low initial investment, have good earning potential, and have flexibility and freedom in your tasks.
5. How do I know if my broker or sub-broker is registered?
You can check the official website of SEBI and see whether your broker and Authorised Person are registered with them or not.
6. How do I know if my broker or sub-broker is registered?
You can check the official website of SEBI and see whether your broker and Authorised Person are registered with them or not.
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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.
