Authorised Person vs Referral Partner: What Is the Difference?
Blog by Aliceblue News Desk
04 November 2026
9 minutes
Your broker’s app shows a banner: “Become our partner and earn on every client.” Do you need an exchange registration for that, or can you just share a link? It depends on which kind of partner you become.
An authorised person (AP) is appointed by a stockbroker and registered with the stock exchange to onboard and support clients. A referral partner only points people to the broker and earns a commission when they trade. Below you’ll see how each role works, what each can earn after costs, and how to choose.
A few terms first. Brokerage is the fee a broker charges per trade. Revenue share is the part of that fee the broker pays you. A segment is a market section, such as cash or futures and options. KYC is the ID check every account needs.
Table of Contents
Quick Answer
An authorised person is the broker’s registered agent. They help clients open accounts, use the trading app, and get support, and they follow exchange rules. A referral partner only shares the broker’s link or code and earns a commission when the referred person trades. One handles clients. The other makes the introduction and steps back.
What Is an Authorised Person?
An authorised person is someone a stockbroker appoints to act as its agent and give clients access to the exchange’s trading platform. It can be an individual, a firm, an LLP or a company. The framework comes from SEBI’s 2009 circular on market access through authorised persons, and the broker needs the exchange’s approval first.
An AP is not a broker. The broker holds the licence and answers for what the AP does. APs also don’t register with SEBI on their own.
The daily work is simple. You help someone open a demat and trading account, show them how to place an order, and sort out small problems. Clients send money and shares to the broker, never to you.
What Is a Referral Partner?
A referral partner brings clients to a broker and gets paid a share of the brokerage those clients generate. They don’t service accounts, take orders, or give anyone market access.
Payouts depend on the broker. Alice Blue’s partner page says its current offer is 100% revenue share for the first 3 months on eligible segments, then 60% from the 4th month while the client stays active, subject to terms. The formal wording is in its referral partner policy.
Avoid saying “I work for this broker.” Legal commentary on referral arrangements, such as Vinod Kothari’s note, warns that agency language can make clients think you act for the company. The note is about lending, but the point holds here. “I use this broker and recommend it” is safe.
Brokers also use “partner” loosely. Alice Blue’s page, for instance, uses “Business Partner or Authorised Person” for people who acquire and support clients. So read the agreement. What you’re allowed to do matters more than the title.
How Does Each Role Work?
An AP’s path:
- You and the broker sign a written agreement covering duties, revenue share and exit terms.
- The broker files your registration with the exchange. You don’t apply yourself.
- Once approved, you can onboard and support clients.
- Clients pay brokerage to the broker, and the broker pays you your agreed share.
A referral partner’s path is shorter:
- Join the broker’s programme.
- Take your link or code.
- A friend opens and activates an account through it.
- The broker credits your commission under the programme terms.
Example With Numbers
These figures are made up to show the idea. Real payouts depend on the broker’s plan.
Ritu teaches in Pune and refers 10 friends. Each pays around ₹1,000 a month in brokerage, so ₹10,000 in total. On the 100%/60% structure above, she earns ₹10,000 a month for three months. From the fourth month, she earns ₹6,000 if everyone keeps trading. If three friends stop, brokerage falls to ₹7,000, and she earns ₹4,200.
Manoj runs an AP office in Nashik with 100 active clients. Each pays about ₹800 a month, so ₹80,000 in all. Say his revenue share is 70%, which gives him ₹56,000. His monthly costs:
Item | Cost |
Rent | ₹8,000 |
One staff member | ₹12,000 |
Internet and systems | ₹3,000 |
Compliance, training, renewals | ₹2,000 |
Total | ₹25,000 |
He keeps ₹31,000. Now 20 clients go quiet. Brokerage falls to ₹64,000, his share to ₹44,800, and his take-home to ₹19,800. His rent and salary don’t shrink.
Ritu has no costs, but her income moves with her friends’ trading. Manoj’s income is higher, but his bills arrive every month.
Authorised Person vs Referral Partner: Comparison
Parameter | Authorised Person | Referral Partner |
Main job | Market access and client support | Introducing new clients |
Appointed by | Broker, with exchange approval | Broker’s programme |
Agreement | Written agreement with broker | Programme terms |
Client servicing | Yes | No |
Handles client money | No | No |
Eligibility | Set by SEBI and exchange rules, which are being revised | Usually any adult who passes KYC |
Setup | Often an office and staff | None |
Income | Share of brokerage | Share or flat fee per referral |
Compliance work | High | Low |
Who answers for mistakes | Broker and AP | Mostly the partner, under programme terms |
Authorised Person vs Sub-Broker vs Remisier
Older articles use these two words a lot, so here is what they mean.
A sub-broker was a SEBI-registered role. SEBI discontinued it through a circular dated 3 August 2018, and existing sub-brokers were asked to move to the AP framework by 31 March 2019, as Online NIFM notes. A remisier mainly introduces clients, while a sub-broker stays involved in handling them.
How to Become an Authorised Person
Rules are being tightened, so confirm every point with your broker before you apply.
Older SEBI text asked individuals to be Indian citizens, 18 or above, with no conviction for fraud or dishonesty, a good reputation, and a 10th-standard pass. Newer proposals discussed in the market add experience conditions and a security deposit, though not all of it is confirmed.
Certification is another area where sources differ. NSE’s AP FAQ says NISM certification isn’t needed to appoint the AP itself. The AP’s approved users and sales staff still need the right certification for their segment. Ask your broker what applies to you.
Next, pick one broker. An AP can usually work with only one broker per exchange, per Choice India. Then sign the agreement and share your PAN, address proof, bank proof and education proof. The broker files the registration, and NSE lists a registration fee per segment on its AP page. After approval, you can start onboarding. Alice Blue’s partner programme is one place to start.
Advantages and Risks
- An AP builds something that can last: a client base, a name in the area, and a broker’s platform behind you. A referral partner can start today with no money, alongside a job or a content channel.
- The weak spot is the same in both. Your income depends on clients trading, and a dull market means a smaller payout. Brokers can also change terms.
- The bigger danger is behavioural. When your income rises with every trade, it’s tempting to nudge clients to trade more. That costs them money, and later costs you their trust.
- APs carry extra weight. Rent and salaries continue in slow months, a lapse in compliance can end your registration, and you’re the first person clients call when something goes wrong.
Tips for Beginners
- Read the full agreement or programme terms before you sign.
- Ask if the payout needs a minimum number of active clients.
- Never promise returns, and never take money or shares in your name.
- Explain brokerage and risks before anyone opens an account.
- Keep a simple monthly sheet of clients and income.
- If you’re unsure, try referrals first and consider the AP route when you’re ready for daily client work.
Common Mistakes to Avoid
- Sounding like the broker’s staff when you’re only a referral partner can mislead people. Say you recommend the broker.
- Charging clients a fee is not allowed for an AP, who earns only from the broker. Collecting client funds is also off limits, because money must go to the broker.
- Many beginners assume income stays fixed. It doesn’t, so plan for slow months. Others skip the fine print, even though payout slabs and activity rules decide what you actually earn.
- Some people rent an office before doing the maths. Work out how many active clients cover your costs, as Manoj’s table shows.
Which Role Suits You?
The AP role fits you if you want a client-facing business, can handle paperwork and rules, and can cover costs for the first few months. Former sub-brokers and finance professionals in smaller towns often take it.
The referral role fits you if friends, followers, or students already ask you about brokers and you want side income without running anything.
Conclusion
An authorised person is the broker’s registered agent who supports clients and follows exchange rules. A referral partner only introduces clients and has far fewer obligations. The broker pays both, and neither touches client money. Pick the role that fits the time, money, and paperwork you can take on, and read the broker’s current terms before you commit. If you’re not sure, begin with referrals, see how clients actually trade, and think about the AP route later.
Frequently Asked Questions
Blog by Aliceblue News Desk
