Zerodha is one of the leading online brokerage platforms in India. It was founded in 2010. Two brothers, Nithin Kamath and Nikhil Kamath, founded this platform to address barriers related to cost, support and technology for the investors and traders.
Individuals who wish to act as an agent for Zerodha can consider becoming an Authorized Person (AP). In this blog post, we shall explain how to register as an AP with Zerodha.
According to SEBI, an authorized person (AP) is “Any person - individual, partnership firm, LLP or body corporate – who is appointed as such by a stock broker (including trading member) and who provides access to trading platform of a stock exchange as an agent of the stock broker.” SEBI does not register an AP directly. Therefore, it doesn’t charge any fees from them.
Formerly, an authorized person (AP) was known as a sub-broker in India. The SEBI-registered stockbrokers appoint the APs and their approval and registration are dealt with directly by the stock exchanges. The AP registration fee charged by NSE is Rs. 5000 per segment + GST.
To become an AP in India, an individual/entity must fulfill the general eligibility criteria for an authorized person. The criteria is mentioned below:
An individual who wants to become an AP must meet the following requirements:
The individual must be a citizen of India.
They must be at least 18 years of age.
They must not have been convicted of any offence involving fraud or dishonesty.
The individual must have a good reputation and character.
They must have passed at least the 10th standard or an equivalent exam from a government-recognized institution.
The person must hold the required certification for approved users or sales personnel in the relevant segment and must keep this certification valid at all times. If no certification is specified by SEBI, the stock exchange will decide the required certification and monitor compliance.
Must have the necessary infrastructure to discharge the activities on the stockbroker's behalf.
An entity that wants to serve as an AP must fulfill the following requirements:
The entity must be an LLP, body corporate or partnership firm.
All the partners or directors of the entity, as applicable, must meet the eligibility criteria outlined for individuals.
The object clause of the partnership deed or Memorandum of Association (MoA), as the case may be, includes a provision allowing the entity to engage in the securities business.
They must possess the necessary infrastructure to discharge activities on the stockbroker’s behalf.
Here are the prescribed conditions for appointing an AP in India:
The stockbroker and AP must enter into a written agreement with the stock exchange. In the agreement, activities, responsibilities, confidentiality of information, commission sharing, termination clause etc., shall be covered in relation to AP.
The responsibility for all acts of omission and commission of the AP shall lie with the stockbroker.
All acts of omissions and commission of the AP shall be considered to be those of the stockbroker.
The AP shall not receive/pay any money or securities in its own name or account. All receipts and payments of securities and funds shall be made in the stockbroker’s name or account.
The AP shall receive his remuneration, including fees, charges, commission, salary etc., for his services only from the stockbroker. He shall not charge any money from the clients.
A person shall not be appointed as an AP by more than one stockbroker on the same exchange.
A Partner/Director of an AP shall not be appointed as an AP with the Exchange.
Here’s how to register as an AP with Zerodha:
Step 1: The individual must agree and adhere to the policies of Zerodha at all times. The following are additional requirements they must fulfill to register as an AP with Zerodha, apart from the previously mentioned eligibility criteria:
The individual must have an account on Zerodha.
They must have an organic source of lead for acquiring clients (leads must be generated without paid advertising or non-organic methods like trade inducement).
They must hold a bachelor’s degree or equivalent qualification from a recognized educational institution.
The individual must’ve passed the NISM Series VIII - Equity Derivatives certification.
Step 2: After fulfilling the above criteria, the applicant must create a ticket on the Zerodha Support Portal with the following details:
Contact information
Source of leads
Entity type (Individual, Firm, LLP, etc.)
Nature of business.
Step 3: Once they have submitted the ticket, they must wait for a response from the Zerodha team. Generally, it may take around 2 working days to receive an initial response.
Step 4: After that, Zerodha will conduct a thorough review. If Zerodha is satisfied that the applicant meets the requirements, it’ll approve the AP registration.
Step 5: For final approval, Zerodha will submit the application to the stock exchange.
An Authorized Person (AP) is an individual or a business entity appointed by a stockbroker to work on their behalf. They cannot charge fees directly from the clients. Instead, they earn remuneration for their services from the stockbroker. An AP cannot be appointed by more than one stockbroker on the same stock exchange.
Want to become a SEBI-registered stockbroker in India? Connect with our consultants at Registrationwala for assistance in the SEBI stockbroker registration process.
Q1. Do Authorized Persons (APs) need to register with the Securities and Exchange Board of India (SEBI)?
A. No, the APs do not need to register with SEBI. However, they do need to register with the stockbroker and the stock exchange on which the broker is a trading member.
Q2.Can an individual be appointed as an AP by more than one stockbroker on the same stock exchange?
A. No, an individual cannot be appointed as an AP by more than one stockbroker on the same stock exchange.
Q3. Can a stockbroker-appointed AP charge fees from the clients?
A. No, an AP appointed by a stockbroker cannot charge fees from the clients. They receive remuneration for their services solely from the stockbroker.
Q4. What is NISM Series VIII - Equity Derivatives certification?
A. It is a SEBI-mandated examination conducted by the National Institute of Securities Market for professionals in the equity derivatives industry.
Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.
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