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Sub Broker | November 02, 2022

How to Become a Sub-Broker?

A stock market sub broker is a financial professional who facilitates the trading process. They are responsible for managing their clients' risks and the risks associated with their own trades.

A sub broker in the stock market trades in stocks on behalf of another brokerage firm. He or she is an agent having an association with a stock exchange's trading member. To become a sub-broker, you should get registered with the Securities and Exchange Board of India (SEBI) alongside any of the local stock exchanges as well.

Sub-brokers provide liquidity to the market and help investors who want to trade shares. This means that they are in charge of managing a portfolio of securities, arranging for the purchase or sale of those securities, and handling any complaints about the securities. This position typically requires strong math skills, analytical thinking, and experience working in the stock market. A successful applicant will also have knowledge of how to trade stocks and bonds.

They are intermediaries that offer services to the brokerage firm that employs them. The role of the sub-broker in the stock market is to buy and sell securities on behalf of the brokerage firm, often at prices different from those offered by other brokers. This can be done either over the counter or on an exchange, but most often, it takes place over the counter. If you wonder how to become a sub-broker, here is all you need to know!

Process of Becoming a Sub-Broker

Most aspiring candidates are unaware of how to become a sub-broker regarding examination and registration. However, the process is relatively swift and hassle-less. Here are the steps you need to carry out:

  1. Apply for a certification exam by the National Institute of Securities Markets (NISM) consisting of modules on mutual funds, equities, derivatives, and commodities.
  2. Register yourself online with the Securities and Exchange Board of India (SEBI).
  3. Upload the essential documents on SEBI’s official website and complete the process by paying the registration fee with the amount for the initial deposit.
  4. Register with any local stock exchange.
  5. You will have to apply at a well-established and leading brokerage company to become a sub-broker to get access to training, study material, tech-enabled tools, and valuable assistance.

Necessary Credentials for a Sub-Broker

Before starting off your journey on how to become a sub-broker, you must fulfill the below-mentioned eligibility criteria:

  • A Secondary School Graduation Certification
  • He/she should be 21 years old
  • Having comprehensive familiarity with financial services
  • Must have passed the NSIM certification exam

What Are the Functions of a Stock Market Sub Broker?

  • The primary function of a sub-broker in the stock market is to act as a conduit for large orders from one broker's clients into another broker's order book and vice versa, without allowing any direct trading between clients or brokers themselves.
  • Stock market sub-brokers help traders manage risks by providing them with advice, trading strategies, and risk management tools. They also provide information about different markets and trends so traders can make informed decisions.
  • Their job is to manage the risks of their clients, manage their own trades, provide information about different markets and trends, and provide advice on trading strategies. The sub-broker in the stock market is usually compensated by transaction fees and commissions on the securities they buy and sell.

Significance of a Stock Market Sub-Broker

The role of a sub-broker in the stock market is to provide liquidity to the market by buying and selling securities. The job is mainly done through the use of an automated trading system.

There are three main types of stock market sub-brokers:

  1. Full-service brokers who offer a wide range of services, including research, portfolio management, trading on behalf of clients, and investment advice;
  2. Market makers who buy and sell securities to provide liquidity;
  3. Central counterparty clearing houses that work with banks and other financial institutions to settle transactions.


Sub-brokers are the key to the success of a stock market. They are the ones who make sure that investors get the best deals, and they can also provide them with recommendations on what to buy and sell. Sub-broker can earn commissions by trading in stocks that they own themselves. If you want to know how to become a sub broker, the information mentioned above will help you move ahead with this lucrative and flexible career option.

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