An Ultimate Guide to an Authorised Person

Authorised persons are crucial to securities trading as they act as intermediaries between investors and stockbrokers. These individuals or entities are also known as sub-brokers. They are one of the most important intermediaries for smooth and efficient trading operations. The involvement of an authorised partner ensures that the investor can easily navigate the complexities of the financial markets. This article will discuss the concept of an authorised person, their roles, responsibilities, eligibility criteria, and the benefits they bring to both investors and stockbrokers.

Who is an Authorised Person?

An authorised person is known as a sub-broker. A stockbroker appoints an individual or entity to act on their behalf as an authorised person. The function of an authorised person is to act as a bridge between the stockbroker and the investor. They are not members of the trading floor but instead, aid investors in trading securities by being agents for the stockbroker.

Roles and Responsibilities of an Authorised Person

The process of trading stocks involves many roles and responsibilities that are ensured to flow smoothly by the authorised persons. The core functions include the following:

• Facilitating Transaction: An authorised person plays an important role in smoothing the trading process, with transactions being executed efficiently and accurately. Assistance from this person means that investors are in a position to enter and leave the market at the right time, thus eliminating delays in executing trades.

• Investment Advice: Authorised persons are generally better equipped with knowledge of market trends, financial products, and investment options. This provides them with the ability to guide investors with the best available options to suit their financial objectives and risk appetite.

• Client Relationship Management: Maintaining sound relationships with clients is yet another critical function of an authorised person. He would be the first point of contact for an investor who can address any concern or question that he may have related to his investments.

• Business Development: Authorised persons contribute a lot to the growth and prosperity of stockbrokers. That is because authorised persons attract new clients into the business, thereby widening the stockbroker's customer base.

• Ensuring Compliance: Compliance should be present in all the deals. Authorised persons must ensure that all transactions are carried out under applicable laws and regulations. They should maintain records that include accurate accounts of their clients' transactions as well as communications for total transparency by relevant regulatory requirements.

Requirements to be an Authorised Person

To become an authorised person, the individual or the entity must meet the following eligibility criteria. Elaborated criteria for an authorised person are as follows: 

• Registration with SEBI: For a legal operation, an authorised person has to get a certificate of registration from SEBI. Such registration will ensure that the authorised person will follow all the required regulatory compliance and is eligible to offer services related to securities trading.

• Agreement with Stock Broker: An individual or entity is expected to have an existing agreement with the stockbroker about scope, responsibilities, and remuneration. In this regard, such an agreement forms a legal framework where the authorised person operates according to the policies of the stockbroker.

• No Direct Client Payments: The authorised persons must not receive any direct payments or securities from the clients. All should be done through the stockbroker's account, hence maintaining proper visibility and averting the possibility of fraudulent practices.

Advantages of Hiring Authorised Person

Hiring an authorised person has many benefits for investors and stockbrokers. Here are some benefits of working with an authorised person:

• Expertise and Knowledge: Authorised persons hold a rich experience in the working of the stock market. Their experience and knowledge about investing strategies, market trends, and financial instruments help them provide the desired advice.

• Enhanced Accessibility: Authorised persons serve as accessible points of contact, enabling investors to resolve queries and access trading services seamlessly

• Personalised Service: Probably one of the most important advantages of trading with an authorised person is that they provide personalised services. Since authorised persons are not brokerage houses and don’t have the same requirements as big brokerage firms, they tend to focus more on building close relationships with their clients.

• Reduced Risks: As an authorised person, the person ensures that the transactions with clients are in line with the relevant regulations to add less risk of fraud or regulatory issues. 

Conclusion

Authorised persons form an important intermediary agency in the securities trading ecosystem-the connection between the stockbroker and the investor. By facilitating transactions, offering expert advice, maintaining client relationships, contributing to business development, and ensuring compliance, authorised persons are integral to the success of investors and stockbrokers alike. There are so many best stock broker app that provides easy access to trading, real-time updates, and a smooth user experience for all investors.