Any individual wanting to invest in stocks may have to go through an authorized person. They are professionals who will guide the investor through the entire process. An authorized person can help individuals with investing in equities that suit their preferences and also will incur profits in the future. In laymen's terms, authorized persons are those who function as a point of contact between investors/traders and stockbrokers to make the entire investing process easier.
Most of the time people fail to recognize the role of an authorized person. So, to understand what critical role this market player has in the market ecosystem, let’s explore it in detail.
Getting to know the authorized person
An authorized person works under the supervision of stockbrokers and undertakes the task of presenting the investors with multiple investment opportunities. Buying, selling, and dealing with securities are among the responsibilities of authorized individuals, alongside supporting stockbrokers in boosting their business volume.
Activities performed
To carry out all these activities, the authorized person needs to be registered under SEBI. And a contract is drawn between them and the stockbroker addressing the regulations, rules, rights, and mutually agreed economic terms.
Responsibilities of an Authorized Person
Multiple duties on different frontiers are required of authorized people. The frontiers can be about stock brokers, stock exchanges, and prospective clients.
authorized individuals work under the stockbrokers' brand and are responsible for a set of responsibilities to the brokerage business that employs them. They need to assist the brokerage house in increasing the volume of trading deals. And while doing so, they will be required to maintain a good relationship with the clients and have a transparent sales contract.
Since the authorized persons are not directly associated with stock exchanges, once they successfully obtain their franchise from a stockbroker, their major responsibility is to provide customers with helpful equity recommendations and to aid them in making better, informed investment selections and decisions.
Since authorized personnel are the point of contact for the clients, they are the ones on whom clients are most dependent. They need to provide the clients with the best deals that suit their preferences. A good deal means the clients will return with a request for reinvestment. This way, the authorized person can assist the brokerage company in increasing its business while also allowing clients to obtain a good return on their investment. So, ultimately, the most important responsibility of an authorized person is to concentrate on raising the bar for the number of investment deals executed by them and return maximum clients.
How to become an authorized person
If you wish to start as an authorized individual, follow these steps: Becoming an authorized person is quite easy. All the person needs to do is complete the verification process.
Overall, when seen holistically, an authorized person is a very important individual to help function the entire financial market. Moreover, the person is also incentivized heftily for carrying out all their responsibilities.