In the financial markets, an authorised person plays an important role in bridging the gap between stockbrokers and investors. This person is registered under the guidelines of market regulators such as the Securities and Exchange Board of India (SEBI). An authorised person facilitates trade and improves the market reach by extending the broker’s presence to various geographical locations. In this article, we will discuss the important roles and responsibilities of an authorised person and the factors that influence their earnings.
Who is an Authorised Person?
An authorised person is an entity or an individual who is authorised by a stockbroker to act on their behalf in facilitating trade and other services for investors. The role of an authorised person is to build a business book of the stockbrokers by bringing in new investors and helping existing clients in reinvestment.
Key Roles and Responsibilities of an Authorised Person
The primary role of an authorised person is serving clients and aiding the operations of the stockbroker. The following are the key roles and responsibilities of an authorised person:
1. Client Acquisition and Support
An authorised person undertakes activities of identifying prospective investors and presenting them with opportunities on the stock exchange. They guide their clients on how to open trading and Demat accounts in union with an associated broker. An authorised person provides advisory services for clients to help in making informed decisions in investments.
2. Trade Execution
An authorised person facilitates the performance of buy and sell orders on behalf of clients. They also ensure timely and accurate trade placement to avoid differences. An authorised person stays updated on the latest market trends, policy changes, and technological advancements to serve clients better.
3. Market Education and Awareness
Authorised persons educate clients about market trends, investment strategies, and regulatory changes. They conduct workshops or webinars to improve financial literacy among investors. The authorised person provides clear information about brokerage fees, charges, and terms of service to clients.
4. Compliance and Reporting
They ensure adherence to the guidelines set by SEBI and stock exchanges. Their main role is also to maintain proper records of transactions, agreements, and client interactions. An authorised person submits periodic reports to brokers, ensuring transparency in operations. The major responsibility of an authorised person is to follow the rules and regulations laid down by SEBI and stock exchanges and avoid indulging in any fraudulent or unethical practices.
5. Ensuring Financial Integrity
They avoid unauthorised transactions and ensure funds are handled responsibly. Verify that sufficient funds or securities are available before placing orders. They protect client data and ensure that sensitive information is not misused.
6. Conflict Resolution and Customer Handling
An authorised person plays an important role in addressing and resolving client complaints. They act as a bridge between clients and the stockbroker, ensuring prompt responses to queries and issues. They mediate conflicts related to trades, account discrepancies, or other concerns, ensuring client satisfaction and maintaining trust. Additionally, they ensure that client feedback is communicated to the broker for service improvements.
Factors Influencing the Earnings of an Authorised Person
Several factors may influence the monthly earnings of an authorised person. They include:
Industry and Sector
The earnings of an authorised person can vary widely depending on the industry they are in. For example, an authorised person working in the stockbroking industry might have different earnings compared to one working in the banking or insurance industry.
Qualifications and Certifications
The earning potential of an individual can be enhanced based on the qualifications or certificates they have like Chartered Accountancy (CA), Certified Financial Planner (CFP), or licenses from regulatory bodies such as the SEBI (Securities and Exchange Board of India)
Experience and Expertise
To determine the earnings of an authorised person, experience plays a significant role. An individual with years of experience may have higher earnings than a newcomer. Additionally, expertise in a particular niche or specialisation can also impact earnings.
Location
The location also influences the earnings of an individual. For instance, an authorised person who is working in a metropolitan city may have higher earnings compared to the one working in smaller towns or cities.
Conclusion
The role of an Authorised Person is indispensable in bridging the gap between investors and stockbrokers. By combining regulatory compliance with client-centric services, they contribute significantly to the efficiency and integrity of financial markets. In today’s digital age, many authorised persons use online trading app to provide seamless services to clients, offering real-time market updates, easy trade execution, and portfolio management on the go. These apps enhance accessibility and transparency, making it easier for investors to stay connected to the stock market.