Who is an Authorised Person (AP) and how to register as an AP with Zerodha?

As per SEBI (WEB), an Authorised Person (AP) refers to any individual, partnership firm, LLP, or corporate body appointed by a stockbroker to act on their behalf. A stockbroker may appoint one or more authorised persons after obtaining prior approval from the relevant stock exchange. The approval and appointment apply to a specific segment of the exchange (WEB).

Procedure for appointment of an AP

1. The stockbroker selects a person or a firm for appointment as an AP in accordance with the criteria and framework established by the exchange and submits the application to the exchange for approval.
2. Once the application is received, the stock exchange may either approve the person as eligible for appointment or deny approval if it determines that the individual does not meet the eligibility criteria for the role of an AP.

Eligibility criteria for an individual to be appointed as AP

An individual is eligible to be appointed as an AP if he or she:

• Is a citizen of India.
• Is at least 18 years of age.
• Has not been convicted of any offence involving fraud or dishonesty.
• Has a good reputation and character.
• Has passed at least the 10th standard or an equivalent examination from an institution recognised by the government.
• Holds the necessary certification applicable to approved users or sales personnel for the respective segment and commits to maintaining valid certification thereafter. (The stock exchange shall prescribe appropriate certification if none is specified under SEBI regulations and will monitor compliance.)

Eligibility criteria for a non-individual to be appointed as AP

A partnership firm, LLP, or corporate body is eligible to be appointed as an AP if:

• All the partners or directors, as applicable, meet the eligibility criteria outlined for individuals.
• The object clause of the partnership deed or Memorandum of Association (MoA) includes a provision allowing the entity to engage in the securities business.

The person shall have the necessary infrastructure, such as adequate office space, equipment, and manpower, to effectively discharge the activities on behalf of the stockbroker.

Conditions of appointment

The following are the conditions for the appointment of an AP:

• The stockbroker is responsible for all actions, whether omissions or commissions, performed by the AP.
• Any acts of omission or commission by the AP are considered those of the stockbroker.
• The AP must not receive or pay any money or securities in their own name or account; all receipts and payments must be made in the name or account of the stockbroker.
• Remuneration for the AP, including fees, charges, commissions, salary, etc., must be received only from the stockbroker. The AP is not allowed to charge clients directly.
• A person or an entity cannot be appointed as an AP on the same stock exchange by more than one trading member.
• A partner or director of an AP cannot be appointed as an AP on the same stock exchange.
• The stockbroker and the AP must enter into written agreements in the formats specified by the exchange. These agreements should cover aspects such as the scope of activities, responsibilities, confidentiality of information, commission sharing, termination clauses, and more.

How to register as an AP with Zerodha?

In addition to complying with all the appointment conditions and eligibility criteria mentioned, an AP must also agree to and abide by Zerodha’s policies (PDF) at all times. To register as an Authorised Person (AP) with Zerodha, you also need to meet the following requirements:

• Existing client of Zerodha: You must have a Zerodha account.
• Organic lead source: You should have an organic lead source for acquiring clients. This means your leads should be generated without using paid advertising or non-organic methods such as trade inducement.
  

Once the above criteria are met, create a ticket mentioning the following details: Your contact information, source of leads, entity type (Individual, Firm, LLP, etc.) and nature of business. After submitting the ticket, you will receive a response within 2 working days. We will conduct a thorough review, and the AP registration process will only proceed if Zerodha is fully satisfied with the findings.