Understanding the Difference Between Sub Brokers and Remisiers: 5 Key Points

Understanding the Difference Between Sub Brokers and Remisiers: 5 Key Points

Numerous intermediaries are essential in linking investors with trading opportunities in the ever-changing Indian stock market. Remisiers and sub broker are two examples of such significant individuals. Although they both aid in the facilitation of stock market transactions, their functions as well as duties are different. Anyone pursuing a career in stock broking or wishing to enter the stock market must be aware of these distinctions. Let's examine five key differences between them.

1.     Registration and Legal Status

Through their associated main broker, sub brokers are required to complete a formal registration process with the Securities and Exchange Board of India (SEBI). They are given a SEBI registration number and are subject to stringent regulations. They are legally recognized as authorized stock market intermediaries as a result of their registration. Remisiers, on the other hand, operate more casually as commission agents and are exempt from SEBI registration requirements, provided that they have a contract with their linked broker.

2.     Business Structure and Independence

Sub Brokers can set up their own offices to do business and have more operational autonomy. While operating under the major broker's auspices, they possess the power to establish their brand identity. They can function as a mini-broking house, retain their clientele, and hire employees. However, Remisiers usually operate alone and are unable to establish separate offices or recruit more employees. They work out of the primary broker's office and concentrate mostly on customer referrals.

3.     Revenue Model and Earnings

The compensation scale for these positions varies greatly. Generally speaking, sub brokers get a bigger portion of the brokerage fees—between 50 and 70 percent of the total brokerage made from their clients' transactions. They may make more money, but they also have to pay operating expenses. Because they operate under the primary broker's infrastructure, remisiers have low operating costs but receive a lesser commission, often between 30 and 40 percent of the brokerage fees.

4.     Client Relationship Management

Sub brokers are tasked with more complex client relationship management duties. They are capable of handling customer inquiries, collecting papers, maintaining independent trading terminals, and acquiring clients on their own. They frequently provide a wide range of services, such as creating an account, giving trading guidance, and providing frequent market updates. Referrals from clients and basic service coordination are Remisiers' main priorities. They continue to play a more restricted advising role, referring clients to the primary broker for account opening and other technical matters.

5.     Risk and Liability

These jobs are significantly differentiated by the risk and responsibility components. Sub brokers can be held responsible for the trading activity of their clients and share some legal and financial duties with the primary broker. They have to closely adhere to regulatory compliance and keep accurate records. Because they don't deal with direct transactions or customer accounts, remisiers are less vulnerable. They are only liable for their customer recommendations and commission-based business.

Conclusion

With its own set of benefits and drawbacks, sub brokers and remisier in stock market are both essential components of the Indian stock market ecology. Sub Brokers have more autonomy and financial opportunity, but they also carry more responsibility and danger. Remisiers provide a more straightforward, if more constrained, approach to getting started in the stock market. Knowing these distinctions enables people to choose the position in the stock market business that best fits their skills and professional objectives.