How to Get Stock Broker License in India | Fortune Wealth Academy

How to Get Stock Broker License in India | Fortune Wealth Academy

If you’re aiming to enter the Indian stock market as a professional, securing a stock broker license is your gateway. Whether you’re looking to become a full-service broker, a discount broker, or a sub-broker, understanding the licensing process governed by the Securities and Exchange Board of India (SEBI) is crucial.

This guide walks you through the steps to becoming a licensed stockbroker in India, including eligibility criteria, documentation, regulatory obligations, and recent SEBI updates as of 2025.

To obtain a stock broker license, the applicant must satisfy SEBI’s eligibility requirements. These include:

Individual applicants must be at least 18 years old, have a clean financial and criminal record, and possess knowledge of securities markets.

Corporate entities must be incorporated under the Companies Act, 2013.

Applicants must be registered with a recognized stock exchange like NSE, BSE, or MCX.

Before applying, it’s important to understand the three main categories:

Full-Service Brokers: Offer trading, research, and advisory services. Require higher infrastructure and capital.

Discount Brokers: Provide execution-only services at low brokerage fees. Ideal for volume traders.

Sub-Brokers (Authorised Persons): Work under a registered stockbroker to acquire clients. As per SEBI’s 2018 circular, sub-brokers are now registered as Authorised Persons (APs) and do not hold a broker license themselves but operate under one.

Here are the steps to get a stock broker license in India:

Form a company or LLP as per MCA norms. This becomes the applicant entity.

Choose where you want to register (e.g., NSE, BSE). Each exchange has its own membership rules.

Submit an application to the chosen stock exchange with fees and the required documents. Once accepted, you’ll receive exchange membership.

After obtaining membership, apply to SEBI using Form A along with:

Memorandum & Articles of Association (MOA/AOA)

Net worth certificate (₹3 crore minimum for trading members of equity segments as per SEBI)

Infrastructure proof (office setup, compliance team, trading terminals)

List of directors/promoters with KYC, PAN, and financials

Exchange approval letter

SEBI charges ₹5 lakh (non-refundable) for initial registration as a broker.

The approval process takes 2 to 3 months, provided all documents are correct. SEBI conducts background verification and compliance checks during this phase.

Once licensed, a stock broker must:

Appoint a Compliance Officer

Maintain books of accounts audited annually

Abide by SEBI circulars and stock exchange regulations

Ensure cybersecurity infrastructure, especially if offering online trading

Periodically update net worth and other disclosures to SEBI

As per SEBI’s updated framework, new sub-brokers must register as Authorised Persons under a SEBI-registered broker. They cannot directly access the exchange but act as client acquisition partners. The broker remains liable for all transactions executed via the Authorised Person.

Becoming a SEBI-registered stock broker in India is a structured process, requiring both financial commitment and operational discipline. Whether you’re targeting a full-service or discount model, or planning to start as an Authorised Person, it’s essential to understand the compliance environment and ongoing regulatory duties.

With the right preparation and understanding of SEBI’s evolving regulations, you can successfully establish your presence in India’s dynamic financial markets.