A “sub-broker” is someone who is not a direct trading member of any stock exchange. However, they do act for a trading member like an agent. They also work to assist investors regarding the security aspects through trading members. It is quite essential for sub-brokers to have a certificate of registration through SEBI.
It is here to note that without a certificate from SEBI, they can’t be authorized to deal with security aspects. In fact, according to SEBI, none of the trading members can deal with a person working as a sub-broker without a registration with SEBI. Moreover, the concerned trading member has to be responsible for ensuring that his clients are not performing as a complete sub-broker unless they are authorized by SEBI to be a sub-broker.
It is also essential for the trading members to make an agreement with the sub-brokers, about the rights and duties of the trading members, including the sub-brokers as well.
Role of sub-brokers:
It can be claimed that a sub-broker is a franchise house that takes stock broking franchise from the parent company. There are many renowned stock broking franchisers those offer such opportunities,
Now, the role of the sub-broker is basically to recommend useful tips regarding stock exchange to its clients, in accordance with their estimation of the industry. In some occasions, the franchiser offers stock tips to the sub-brokers for a better help. However, on most occasions, it’s the duty of the sub-brokers to think about these aspects or to deal with these aspects.
It is also the role of the sub-brokers to have a thorough eye on their clients. In fact, the sub brokers also have to feel responsible about making the trading done through their clients, ensuring they earn greater brokerage.
In other words, sub-brokers are the deal makes in stock exchange arena. They are like the game changers playing a big role in making or breaking a deal.
Many people are showing interest in being sub-brokers these days. The prominent reason behind the same is due to the greater revenue share they keep. In general, the sub-brokers keep a greater percentage of the brokerage made by the clients. In fact, the percentage for franchisers gets pretty low in most occasions. One may operate as a sub-broker as an authorized person through a company as well.
Why sub-brokers are important in the stock market?
For the sake of making brokers engaged in trading activities, it becomes essential in most occasions to sign the member-client agreement, specifically those who deal straight with the brokers. However, considering this process comparatively complex, it is always recommended to deal through the sub-brokers.
The best suggestion on this context is to sign the broker-sub broker and client triangular agreement. This makes the process much transparent or legally correct. This is so as such are generally made through the non-judicial stamp papers.
In such agreement papers, the clauses regarding the duties and responsibilities of the client through sub-brokers (or broker as well) are defined. Such documents provided are basically the sample formats. In fact, it is also possible for the stock brokers to include extra points in such documents. However, the point to be noted is that these don’t create confusion with any of the norms as provided with the model documents. It should also not violate the rules, guidelines, or circulars in this regard. Ultimately, the point is making things happen through the sub-brokers is tripartite deals comparatively a much cleaner or legally correct procedure.
One can become a sub-broker through a renowned stock broking company. Modern-day sub-brokers operate through high-end technicalities, facilities, etc provided by the parent broking companies. Working with a renowned broking house is always promising from career perspectives. Along with the whole range of career opportunities, one can avail the back office support for being more productive.
How can they provide the most explicit help?
Sub-brokers always play the most important role in effective deal-making. They provide the most useful and important details to the client to ensure maximum profit. There is every reason for the sub-brokers to be able to provide such effective help. First of all, under the aegis of the renowned broking house, they are given extensive training on various technology platforms or tools for easy functioning.
They are also provided with useful marketing collaterals. Explicit seminars and events reorganized for them to understand the stock exchange or stock broking game well. Moreover, the sub-brokers go through extensive market research reports prior to suggesting something or taking a decision. Someone interested in stock marketing broking may also enjoy crucial help through sub-brokers.
They can guide in all useful ways available for better deal making. In fact, sub-brokers working through renowned broking companies provide important newsletters, email guides, etc making them stay thoroughly updated about the stock marketing world. If you are interested in attaining useful seminars or events regarding the stock exchange or to gather greater knowledge, taking help of sub-brokers can indeed be a nice way.
Ultimately, sub-brokers provide the most useful help in decision making. They make the complex looking stock market work pretty simple. It is always safer to operate through them as well. All that one needs to ensure is that the concerned sub broker is thoroughly authorized or registered as per SEBI.