December 3, 2021
Sub broker in Mutual Funds

How to Become a Sub Broker in Mutual Funds?

Mutual Funds are the talk of the town right now. Without a doubt, this is the perfect time to become a distributor in the financial product. If you too are entertaining such thoughts, and want to learn how to become a sub broker in mutual funds.

This is it, This is the place for you. 

Honestly, you just can’t put your TV on without encountering the commercials displaying mutual funds as the right choice for entering the stock market.

If you’re looking to take advantage of this recent trend by becoming a distributor in mutual funds, we can hardly blame you for it.

Mutual Funds are a financial instrument wherein a group of investors comes together to pool money for investing in a vast variety of securities.

Through mutual funds, investors can make investments in assets such as stocks, equities, bonds, currency, etc.

Now, mutual funds are becoming the preferred route to step into the stock market because of the many advantages that are a part of it.

Firstly, this fund is managed by professional fund managers to help investors meet their investment goals, objectives. 

Investors, traders short on time, and lacking expertise in the stock market can make hefty profits by using this financial instrument.

Plus, purchasing and selling mutual funds is a hassle-free process that is a priority for many traders.

Clearly, the stock market is changing and mutual funds are slowly but surely winning the hearts of investors, traders alike.

It is just a good time for entrepreneurs who should look to make the most of this shift. By the way, the IIFL NCD is a decent enough opportunity to make reasonable returns.

So, in this article, we solve the query regarding how to become a sub broker in mutual funds.

Mutual Funds Sub Broker Requirements

In order to become a mutual fund sub broker, there are a couple of things that you need to take care of.

First that you have the proper knowledge, understanding of the working, and operations of a sub broker.

Secondly, a thorough understanding of the financial product of mutual funds. Since you will be required to help stock market traders, investors in investing in these funds to match their goals, etc.

In all, the list of mutual funds sub-broker requirements includes two major requirements :

  1. Educational Qualifications

The basic educational requirement for becoming a mutual funds sub-broker is that an individual must have a Higher Secondary Certificate (HSC), which means that the individual must have passed the 12th standard at least.

Or the individual must have completed a 3-year diploma from a registered institute after class 10th.

  1. NISM Certification

Further, you will need to clear the National Institute of Securities Markets (NISM) certification exam which covers various modules related to the stock market and financial instruments. 

To be precise, the individual should clear the NISM Series V A – Mutual Fund Distributors Certificate Examination.

This NISM certification is made mandatory by the Indian regulating body Securities and Exchange Board of India (SEBI).

Also, the individual will need to get registered with the Association of Mutual Funds in India (AMFI). 

  1. Work Experience

Although prior work experience in financial institutions, brokerage firms, the stock market isn’t mandatory, it is always a plus for an individual. 

Candidates, despite having ever so little work experience on their CV, are given a preference because work experience tells that the candidate has ample knowledge to work, operate a franchise. 


Mutual Funds Sub Broker Process

An individual can then proceed to the mutual funds’ sub-broker process after making sure that he fulfills the requirements. 

Another thing that needs to be taken care of is that the individual must possess a SEBI registration form. Consider this the first step in the registration process. 

Moving on, there are two methods to become a mutual funds sub-broker –

  1. Becoming a Sub broker with a Stockbroker
  2. Becoming a Sub Broker with Mutual Fund Companies

We will be looking at both the methods that facilitate individuals to become sub-brokers of mutual funds.


Become a Sub broker with a Stockbroker

Individuals have the chance to become sub-broker with well-established stockbrokers. There are many stockbrokers, both full-service as well as discount brokers that offer business partnerships.

To list a few of the eminent names in the stockbroking industry that offer sub brokership opportunities :

The sub-broker registration process follows the following steps:

  1. The first step is to apply for the NISM Series V – A Mutual Fund Distributors Certification. This test is made mandatory by SEBI.
  2. After clearing the test, the individual becomes eligible for becoming a mutual funds sub-broker. 
  3. Then, the individual will require to fill a KYD (Know your Distributor) form and the AMFI Registration form. 
  4. The AMFI form is available online or you can visit any of the CAMS-KRA offices. 
  5. After verification of your details, the individual will be provided with their AMFI card consisting of their ARN (AMFI Registration Number).
  6. Using the ARN number, the individual is eligible to become a mutual funds sub-broker with any of the stockbrokers of their choice.

Become a Sub Broker with Mutual Fund Companies

Similarly, individuals can choose to become sub-broker with a mutual fund company as well. There are many asset management companies, mutual fund houses that you can associate with.

The registration process follows a similar pattern as with becoming a sub-broker with a stockbroker.

The process starts with the individual acquiring NISM Series V – A Mutual Fund Distributors Certification. 

After submitting a KYD form and the AMFI form, the individual acquires their ARN which is required to register with a mutual funds company. 

If you are looking for a business partnership with a full-service broker registered with NSE, then read how to become sub-broker in NSE


Documents For Becoming Mutual Funds Sub Broker

Here’s the list of documents you will need to submit at the time of registering as a mutual funds sub-broker. 

The mandatory documents for becoming mutual funds sub-broker may be different from one broker to another, however, consider the following as a minimum :

  • Identification Proof – PAN card, Aadhaar Card, Voter ID Card, Driving License, Passport.
  • Address Proof – Aadhaar Card, Driving License, Voter ID, Electricity Bill, Phone Bill, Passport, Ration Card.
  • Educational Proof – Copy of Graduation degree certificate, NISM Certificate copy
  • Age Proof – Aadhaar Card, Driving License, Voter ID Card, or any other valid certificate that has a mention of age.
  • SEBI Registration certificate 
  • Passport Size Photographs

Conclusion 

Mutual Funds is the new sweetheart of Indian investors and traders alike. Such has been the charm of mutual funds that many first-time traders are now looking up ways to invest in mutual funds.

This sudden and massive rise in demand for mutual funds as an investment tool is paving fresh pathways for entrepreneurs who can get into the business of distributing the financial product. 

As for the query – how to become a sub broker in mutual funds, the registration process is pretty straightforward. There are some requirements that need to be met. 

This includes educational qualifications, i.e the individual should hold an HSC certificate as a minimum educational qualification.

Along with this, the Indian regulatory body and AMFI have mandated that the individual should possess a NISM certification.

Further, there are two methods to become a mutual funds sub broker, however, the registration process remains the same for both.

The individual just requires to fill in a couple of forms, KYD (Know your Distributor), and the AMFI registration form. 

Once the individual has their ARN number, then they can approach any stockbroker or a mutual fund company of their choice.

In case you wish to become a sub broker or a stockbroking business partner in any capacity, let us assist you in taking the next steps forward:

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