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Thursday 6 October 2022
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What are the responsibilities of a sub-broker?

What are the responsibilities of a sub-broker?

A sub-broker is a stock-broker representative who operates on his or her behalf. In terms of his employment, he is not really a stock market trader. Overall, the tasks of sub-brokers include acting as a representative for a stockbroker and aiding him in the purchase, sale, and trading of securities.

He also advises the dealer on real deals. In addition, he communicates with investors and advises them on stocks investments. To become a sub-broker, you must first need a SEBI accreditation certificate by the SEBI Regulation of 1992. The certificate authorizes him to purchase, sell, or negotiate in securities and stock markets.

The Dealing Member also should guarantee that neither of his customers fulfils the duties of a sub-broker first obtaining an approved certificate from SEBI. Besides ensuring that a sub-broker is registered with SEBI, the dealing member must also concur with the sub-broker. The contract provides the rights and responsibilities of the market makers, particularly sub-brokers.

You may find out more by reading our in-depth analysis of sub-broker agreements.

Because sub-brokers are intended to connect a stock-broker and a customer, it is critical to also incorporate the sub-broker in such a collaboration between both entities.

According to the terms of the contract, he would help the customer obtain the contractual document from the primary broker. It is vital to note that he can have no authority to transmit transactions straight to the customer, unlike a brokerage.

After becoming a qualified sub-broker, the next key step is to comprehend his function in many aspects of his employment, such as securities exchange, involving clients, and stock-broker. In this section, we have mentioned the key duties of sub-brokers in various fields.

Sub Broker’s Function in the Stock Market 

A sub-broker, in essence, is a licensee house that possesses a stock-broking business through the root firm. By associating with some of the known franchisers proactively participating in the stock market, one may reap the rewards of a sub-broker.

Upon obtaining the brokerage franchise, the main job of the sub-broker is to provide valuable stock market suggestions to consumers.

The brokerage also provides entire help to the sub-broker in doing his or her duties and dealing with numerous stock elements. Another crucial role of a stock market sub-broker is maintaining a close check on their customers. This guarantees earning the highest commission by delivering the greatest trading help. As a result, the primary job of the sub-broker in trading platforms is to execute the most trades in his region.

Sub Brokers’ Roles in Stock Brokerage 

Aside from their principal position on the stock market, sub-brokers are expected to owe a great deal to the brokerage who selects them. The below are among the primary functions for a stock broker’s sub-broker.

Help Stock-broker

The primary duty of a sub-broker is to help a brokerage firm complete the best possible transactions. He assists him in obtaining a large number of consumers who are eager to engage in their stock as well as securities. Restricts Bad Information Handover: The sub-broker must not supply incorrect or incorrect papers.

Work cooperatively with a Brokerage firm to Protect Customers:

A sub-broker should work with his brokerage and maintain a diary of operations. They seek to safeguard the client’s interests in earnings, incentive rights, securities, as well as other securities-related matters. They must also work with other agreement participants to replace papers that have been flagged as unsatisfactory delivery.

Operate as a Principle Broker’s Representative:

A sub-broker should intervene in place of the main broker in issuing the customers’ purchase as well as sale agreements. This assists the broker in obtaining detailed information about all successful entries in favour of their customer.