Individuals looking to start a new business venture as an authorised person need to first get their firm registered. All individuals are mandated to approach SEBI (Securities and Exchange Board of India) and get their respective registration certificates. SEBI has declared that no trading house will be permitted to deal with authorised persons unless they have a valid authorised person certificate.
In order to successfully pass the authorised person registration process, SEBI has established certain processes that individuals must adhere to. This article looks at the registration process for new authorised persons.
Registration Forms
Application from the respective broking house (available on the official website) for obtaining recognition as authorised person. The application must be duly signed and stamped with signatures of both applicants and broking house. Other forms include:
1. Form-B: Duly signed and stamped in the prescribed format as defined by the broking house.
2. Form-C: In the prescribed format of the concerned broking house along with the member’s letterhead. The form needs to be duly signed, bearing SEBI registration stamp of the broking house.
3. Official letter by broking house authorizing the exchange to debit the respective firm’s charges account to process fees of authorised person registration.
4. Two reference letters recommending the applicant in question. One reference should be from the applicant’s banker.
Additional Declarations
In addition to the three forms mentioned above, the applicants must also submit declarations regarding ethical and personal bona fides.
1. Undertaking in the prescribed format from the applicant will deal directly with investors and not through any other authorised person and undertaking for no action taken against the applicant.
2. Declaration in the prescribed format from the applicant has not been convicted of any offence involving fraud or dishonesty and no trial is pending against them in court of law.
3. Certified true copy of agreement between broking firm and the authorised person on Rs.100/- Stamp paper / Franked paper along with signatures of witnesses.
4. Declaration of sharing of profit ratio between partners along with number of partners and asset details.
Documents
Along with the forms mentioned above, the authorised person must submit the following documents:
1. Certified attested photocopies of proof of ID certifying age, along with pass certificate for HSC and PAN card of applicant. If there is more than one applicant (partner/director), all documents for respective members must be submitted.
- Minimum age of applicant: 21
- Minimum qualification of applicant: HSC (High School Pass)
2. If an applicant does not meet the minimum qualification criteria, they must submit a Market Experience Certificate. This certificate must be in adherence with a SEBI registered firm and must be in the hard copy.
Other Declarations as Required
1. In case the applicant is a corporation, a certified true copy of the ROC Form 32 must also be submitted.
2. In case the applicant is a corporate body, board resolution authorizing directors or signatories to conduct trading activities must be submitted.
3. If the applicant is a partnership, a duly signed notarized copy of partnership deed and memorandum of articles needs to be submitted.
4. If the applicant is a member, a broker database certificate needs to be certified by the regional stock exchange.
5. If the applicant is already registered with SEBI, or is a remisier with the same exchange, an undertaking for cancellation of remisership from the respective exchange needs to be submitted during registration.
Eligibility of authorised person
To be eligible to start as an authorised person, an applicant needs to fulfill the following eligibility criteria.
- Applicant needs to be a resident of India
- Applicants need to be above the age of 18.
- Applicants need to have passed 10thclass.
- Applicants should not be convicted under the Indian penal code.
- Applicants should have a good reputation and a good standing in society.
- Applicant’s company should be registered under Indian Companies Act 1956, or
- Applicants should possess a partnership firm registered under the Indian partnership Act of 1932. Or
- Applicants should possess a limited liability Partnership registered under the LLP Act 2008.
- Applicants should possess the necessary capital or infrastructure to take trading responsibility further for the trading firm.
Authorised Person Registration Fees
In addition to the registration requirements, applicants need to pay a one-time authorised person registration fee. For authorised person registration, applicants need to invest Rs. 2,000 (+GST) per segment.
Final Thoughts
In addition to being eligible as an authorised person, it’s equally important to understand what the business entails. Your understanding of financial markets and in-depth knowledge about stocks should be exceptional. Clients and other invested individuals will look up to you for guidance and advice for investing in the correct manner. Getting yourself registered with SEBI is the first step towards successfully trading as an authorised person.
