An Authorised Person is ‘Any person, individual, partnership firm, LLP or body corporate, who is appointed as such by a Stock Broker (including Trading Member) and who provides access to the trading platform of a Stock Exchange as an agent of the Stock Broker’.
Eligibility Criteria for Individuals
- Should be a citizen of India
- Should not be less than 18 years of age
- Should not have been convicted of any offense involving fraud and dishonesty
- Should have good reputation and character
- Should have passed at least 10th standard or equivalent examination from an institution recognized by the Government
Eligibility Criteria for a Partnership Firm, LLP or Body Corporate
- All the partners and directors, as the case may be, must comply with the eligibility criteria for individuals given above
- The Object Clause of the Partnership Deed and the Memorandum of Association must contain a clause permitting the person to deal in the securities business
- The Authorised Person shall also have the necessary infrastructure like adequate office space, equipment, and manpower to effectively discharge the activities on behalf of the Trading Member.
Conditions of Appointment
- The Trading Member shall be responsible for all acts of omission and commission of the Authorised Person.
- All acts of omissions and commission of the Authorised Person shall be deemed to be that of the Trading Member.
- The Authorised Person shall not receive or pay any money or securities in its own name or account. All receipts and payments of securities and funds shall be made in the name of or account of a Trading Member.
- The Authorised Person shall receive his remuneration- fees, charges, commission, salary, etc. for his services only from the Trading Member and he shall not charge any amount from the clients.
- A person shall not be appointed as an Authorised Person by more than one Trading Member.
- A partner or director of an Authorised Person shall not be appointed as an Authorised Person with the Exchange
- The Trading Member and Authorised Person shall enter into a written agreement(s) in the form(s) prescribed by the Exchange. The agreement shall inter-alia cover the scope of the activities, responsibilities, confidentiality of information, commission sharing, termination clause, etc.
Withdrawal/Cancellation of Appointment
- Appointment of an Authorised Person may be withdrawn by the Exchange
- On receipt of a request to that effect from the Stock Broker concerned or the Authorised Person, subject to compliance with the requirements prescribed by the Exchange, or
- On being satisfied that the continuation of Authorised Person is detrimental to the interest of investors or securities market or the Authorised Person at a subsequent date becomes ineligible under any of the clauses under the eligibility criteria.
- Trading Members, who want to withdraw/cancel the appointment of any of their Authorised Persons, need to give an application for the same in the prescribed format.