Sub brokers are people who are not trading members of any stock exchange but will act on behalf of another person who is a trading member. He or she acts as an agent since he or she assists investors to deal in securities through such trading members. Any broker must have a certificate of registration from a security and exchange board of any country. Otherwise if they do not have such a certificate they are normally not permitted to deal in securities. Security and exchange boards from certain countries have directed that no trading member will be allowed to deal with a sub broker who has not been registered with them. The board also directs that it is the trading members’ responsibility to ensure that their clients will not act in the capacity of a sub broker if they are not registered with the security and exchange board of that country. It is usually a must for both parties that is the trading member and the sub broker to enter into an agreement. Such an agreement must be able to lay down all the rights and responsibilities that the trading member and the brokers will have.
There are also sub broker registrations that trading members are supposed to know. Examples of such registrations include that the member should submit the sub broker registration applications electronically. He should also ensure that the physical documents are received by the exchange in less than seven days from the day of electronic submission. If there is any missing thing in the application, then the application letter is returned to the member. If he or she still insists on re-submitting his application after correcting the errors then certain procedures will have to be followed. Click here for more information about franchise sub brokers.
For any member whose application was successfully received they are usually informed through a letter. In this letter the member is requested to pay the necessary stock and exchange brokerage registration fees. This fee is supposed to be paid the members exchange dues account. This amount will then be debited by the security and exchange board. The applications will then be processed. If the member does not pay the fee in less than ten days then the sub broker applications will be returned to the member. The applicant’s status for fee payment recognition can also be accessed by the member. In case a member cancels a sub broker application after the sub broker has been already been recognized by the board, he or she can demand refund from the board as well. For more information, click here: https://en.wikipedia.org/wiki/Broker.
