Become a Share Broker in India

Helpful Tips to Become a Share Broker in India

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The future of the Indian businesses and India’s stock markets looks bright. The pace at which the number of retail investors in the stock market has increased portrays the firm belief in India’s growth story. The surge in retail investors creates massive opportunities for stock brokerage firms to expand their operations and get hold of new clients. If you are intrigued by the stock market and are acquainted with financial subjects, you can consider the career path of a share broker or a sub-broker. This article will discuss how to become share broker and sub broker.

Role of a Share Broker 

Before we look at how to become share broker, we will first solidify our understanding of a share broker’s responsibilities and services. A stockbroker or a share broker is a SEBI (Securities and Exchange Board of India) authorized individual or firm that functions as a middleman. They provide Demat account and trading account services to connect their clients to the stock exchanges. They may also take up other responsibilities like offering stock advisory services and portfolio management services.

How Can You Become a Share Broker?

To become a share broker, you need to meet the following requirements.

  1. You should be an Indian citizen at least 21 years old.
  2. The minimum qualification in terms of education requires you to complete the Higher Secondary School Certificate (10+2).
  3. You must have experience of at least two years as a partner or assistant, or employee to a share broker.

If you meet the above conditions, you can apply for a stockbroker license and register with a stock exchange like the BSE (Bombay Stock Exchange) and NSE (National Stock Exchange). As a stockbroker, you act as an agent of the stock exchanges and can provide trading services on their behalf. After the stock exchange approves your application, you must obtain the Certificate of Registration (Cor) from SEBI. You can complete this process online by submitting a few key documents, after which you become a licensed share broker.

Tips to Become a Licensed Share Broker

It is not difficult to satisfy the minimum eligibility criteria for becoming a share broker. However, to become a successful share broker, you want to add more skills to your repertoire and expand your knowledge. Here are some tips to help you become a successful share broker.

1. Pursue Further Education

Aim for obtaining a bachelor’s degree, and although there is no particular degree requirement, obtaining one in economics, accounting or other financial subjects will help. You can pursue an MBA (Master of Business Administration) to have a further competitive edge over others. While pursuing further education, look out for internship opportunities to work with existing brokerage firms.

2. Get First-Hand Market Experience from an Early Age

Start investing from an early age with your own money. This way, you will have first-hand market experience. The goal is to understand responsible money management, risk management, and market behaviour.

3. Calculate Costs

Starting a share brokerage firm will undoubtedly incur more than a few expenses. Therefore, you should carefully make a step-by-step plan of the entire process from the registration to the opening of your brokerage firm. Then you calculate the expenses you will incur to complete each step. Besides the current cost, you should also consider the future expenses you will incur.

4. Know Your Target Market

The market opportunity for share brokers is enormous, so it is impossible to provide services to satisfy every type of client. For example, some investors desire multiple services like advisory services and portfolio management services. In contrast, some investors want the essential Demat account services. So, decide which market segment you want to cater to with your services. Based on that, you determine a revenue model and develop a plan to maximize revenue over time. For example, consider charging higher brokerage fees if you intend to provide advisory services.

5. Cover All Legal And Business Formalities

It is essential that you understand all the legal regulations so that you operate within the rules laid down by SEBI. You may want to set up office space and hire the requisite employees to start operations. Lastly, check the records before naming your company to avoid legal trouble.

You now know how to become share broker, and remembering the tips above will keep you on track throughout your journey as an entrepreneur. You can also partner with existing brokerage firms like India Infoline and work as a sub-broker, the middleman between the client and the broker firm.

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