What changed in 2018
On August 3, 2018, SEBI issued a circular discontinuing the registration of new sub brokers and announcing that existing sub brokers would be migrated to the new Authorised Person (AP) category by stock exchanges. The deadline for migration was March 31, 2019, after which “sub broker” ceased to exist as a legal registration category in India.
The transition was administrative, not operational:
- Existing sub brokers’ registration certificates were cancelled and replaced with AP certificates
- SEBI registration fees previously paid by sub brokers were either refunded or adjusted against pending dues
- No new sub broker registrations were accepted from September 2018 onwards
- Authorised Persons came under the direct purview of the stock exchanges (NSE, BSE) rather than SEBI’s separate sub broker registration
Quick summary
- SEBI abolished the “sub broker” registration category in 2018. Existing sub brokers were migrated to the new “Authorised Person” (AP) category.
- The business is identical — same activities, same client relationships, same revenue model. Only the legal label changed.
- “Sub broker” is still the more searched term online; “Authorised Person” is what appears on your SEBI/exchange certificate.
- If you’re applying today, you’ll register as an Authorised Person — there’s no “sub broker license” to apply for anymore.
Why SEBI made the change
The shift from sub broker to authorised person served three regulatory goals:
Simpler regulation
Before 2018, sub brokers required separate SEBI registration plus exchange registration — double paperwork for what was functionally a single business relationship. The AP model consolidated this: exchanges register APs directly, with SEBI overseeing the broader broker-AP relationship through the main broker.
Clearer liability chain
Under the old structure, when something went wrong, it was unclear whether the sub broker or the main broker bore responsibility for client claims. The AP framework puts primary responsibility on the main broker, who must supervise their authorised persons. This protects retail investors.
Reduced compliance overhead for small partners
Sub brokers had their own SEBI registration to maintain — fees, audits, separate compliance filings. APs piggyback on their main broker’s regulatory umbrella. Smaller partners save on overhead; SEBI gets one accountable entity per broker network.
What changed in practice (and what didn’t)
| Aspect | Sub Broker (pre-2018) | Authorised Person (current) |
|---|---|---|
| Registration with | SEBI + exchange (separate) | Exchange directly; main broker submits |
| Registration fee | SEBI fee + exchange fee separately | One bundled registration (NSE ₹2,000 + BSE ₹2,000) |
| Direct SEBI relationship | Yes — sub broker was a SEBI-registered intermediary | No — AP works under the main broker’s SEBI registration |
| Business activities | Client acquisition, KYC, trade routing, advisory under main broker | Identical — same activities |
| Revenue model | Commission split with main broker | Identical — commission split |
| Client trust account | Some sub brokers could hold client funds | APs cannot hold client funds — all routing via main broker |
| Liability for client claims | Shared between sub broker and main broker | Primary on main broker; AP is sponsor’s responsibility |
| Compliance burden | Higher — separate SEBI filings | Lower — main broker handles most filings |
| Exclusivity | Was permitted to associate with multiple brokers (rarely done) | Single broker exclusivity is standard |
Why people still say “sub broker”
Eight years after the change, “sub broker” remains the dominant term in:
- Google searches — “sub broker in India” gets 5–10x more searches than “authorised person in India”
- Casual industry conversation — older partners and clients haven’t switched vocabulary
- Broker websites — many still title their partner pages “Sub Broker Franchise” to match search demand
- Hindi and regional language media coverage of broking
This site uses both terms interchangeably for SEO and clarity. Just remember: when you fill out the actual application, your legal designation is “Authorised Person.” Your SEBI/exchange certificate will say AP, not sub broker. Your business cards, marketing materials, and contracts should use AP terminology to align with regulation.
Practical implications if you’re applying today
You can’t apply for a “sub broker license”
No such category exists in 2026. If a website asks you to apply for a “sub broker license” or “sub broker registration certificate,” it’s either using outdated language or it’s a scam. The correct application is for an “Authorised Person” through your sponsoring broker.
You can’t hold client funds
APs are explicitly prohibited from receiving client funds directly. All client money flows from the client’s bank account to the main broker’s settlement account. If your business model involves any cash handling between you and clients, you’re operating outside the AP framework.
You can only represent one broker at a time
Single-broker exclusivity is enforced. You can terminate your AP agreement and switch brokers, but you cannot legitimately hold AP status with two brokers simultaneously.
The exchange is your direct regulator
If you have a grievance against your main broker or face client complaints, the first port of call is the stock exchange (NSE or BSE) where you hold AP code, not SEBI directly. The exchange’s investor grievance redressal mechanism applies to APs.
Compliance is lighter — but still real
You don’t file separate SEBI compliance reports anymore. But you’re still responsible for:
- KYC verification on every client you onboard
- AML (Anti-Money Laundering) monitoring of client transactions
- Suspicious Transaction Report (STR) filing if you detect red flags
- Maintaining client records for 5 years post-relationship
- Following your broker’s Professional Code of Conduct (binding contractually)
Tax and GST implications
The tax treatment didn’t change with the AP reclassification. Commission earned as an Authorised Person is taxed as business or professional income — same as sub broker income was treated before 2018. Most APs file under Section 44ADA (presumptive taxation) up to ₹50 lakh annual income.
GST treatment is also unchanged: register if annual commission income exceeds ₹20 lakh. The main broker handles GST input credit on commission paid out to you.
Common areas of confusion
“My old certificate still says sub broker”
If you registered before 2018 and never migrated, your original certificate is technically void after March 31, 2019. Contact your main broker to ensure migration to AP status was completed. Operating with a lapsed sub broker certificate is a SEBI violation.
“I want to apply for sub broker registration with SEBI”
You can’t — SEBI no longer registers sub brokers. Apply for AP status through your sponsoring broker; the broker handles registration with the exchanges.
“What about remisier — is that the same as AP?”
No. Remisier is a separate (older) partner category still in use at some full-service brokers, particularly Motilal Oswal. Remisiers earn lower commissions (typically 25–40% of brokerage) and don’t take on KYC or compliance responsibility. APs handle the full client relationship. Some brokers still distinguish; many have merged remisier into their AP programs.
“Is a channel partner the same as AP?”
“Channel partner” is a marketing label various brokers use for their AP program (IIFL uses it explicitly; others use it informally). It’s not a separate SEBI category. Verify the underlying registration: if your contract refers to SEBI/exchange AP registration, you’re an Authorised Person regardless of the broker’s branded label.
Frequently Asked Questions
Is sub broker still legal in India?
The “sub broker” registration category is no longer issued by SEBI. Existing sub brokers were migrated to Authorised Person (AP) status by March 2019. The business activities — client acquisition, KYC, trade routing under a main broker — remain fully legal under the AP framework.
What is the difference between a sub broker and authorised person?
Sub broker was the pre-2018 SEBI registration category; Authorised Person is the post-2018 replacement. The business is identical — same activities, same revenue model, same client relationships. The differences are administrative: APs register through stock exchanges (not directly with SEBI), have lighter compliance overhead, and cannot hold client funds directly.
When did SEBI abolish sub brokers?
SEBI issued the circular discontinuing new sub broker registrations on August 3, 2018. Existing sub brokers had until March 31, 2019 to migrate to Authorised Person status. After that date, the sub broker category formally ceased.
Can I still call myself a sub broker?
Informally, yes — the term is still widely used in the industry. Legally and on official documents (cards, agreements, advertising), use “Authorised Person” to match your registration. Some brokers use the AP term in marketing; others still say “sub broker” or “franchise” to match search demand.
Did the revenue share change with the AP transition?
No — revenue share structures are set by individual brokers, not by SEBI. The 2018 transition was administrative and didn’t affect commission economics.
Do I need to re-register if I was a sub broker before 2018?
The migration to AP status was handled by stock exchanges in 2018–2019. If you held sub broker status then, you should already have been migrated. If you’re unsure of your current status, contact your main broker — operating with a lapsed certificate is a violation.
Can an Authorised Person hold client funds?
No. Under SEBI/exchange rules, APs are explicitly prohibited from receiving client funds directly. All client money must flow through the main broker’s regulated settlement accounts.
What is the relationship between AP and the main broker?
The main broker is the SEBI-registered entity; the AP operates under the broker’s regulatory umbrella as an extension of the broker’s business. The main broker is legally accountable to SEBI for the AP’s conduct; the AP is contractually accountable to the main broker.
Your next step
Now that the terminology is clear, here’s what to do next:
- If you’re researching the business, read the complete sub broker franchise guide
- If you want to apply, walk through the step-by-step process
- To compare earnings, see the commission rates across 15 brokers
- To estimate your income, use the Sub Broker Income Calculator
Disclaimer: Regulatory information is based on SEBI circulars dated August 2018 and subsequent exchange notifications. SEBI or exchange policies may evolve; verify current status with your main broker or directly via SEBI/NSE/BSE official sources before relying on this for compliance decisions. TheBestStockBroker.com is not a SEBI-registered investment adviser or legal adviser; this is educational content.
