Sub Broker Exam

A sub-broker exam is an important milestone which a person needs to achieve if he or she wants to pursue his career in the stockbroking industry in India. In a stock market, the traders/investors purchase and sell securities, stocks, commodities and what not. In order to help them in this process, there are financial service agents (Depository participants technically speaking) who are known as stockbrokers.

Clients are guided about the market and selling securities by them. Then there are sub-brokers who are partners with these stockbrokers at the geographical level.

Sub Broker Exam Basics

To accomplish all the jobs efficiently and effectively, a stockbroker has to be a fast thinker and possess strong skills related to customer service, so that he can stand out among his contemporary contenders in the industry. It is necessary for him to consistently monitor the stock market by a meticulous analysis.

A sub-broker in any stockbroking industry plays a vital role in providing financial and investment products and services to his clients. In order to become a sub-broker in India, you need to clear the sub-broker exam, after which you will perform various functions such as the execution of a trade, handling the client portfolio, providing assistance in the clients’ trading and investments etc.

You may think it as a sub-broker license as well which he/she needs to move further in this business segment, much like a pharmaceutical dealer who needs to have a license to run a business.

Read on to know more details about this sub-broker exam.


Sub Broker Exam Qualifications:

People having educational degrees can make them more skilful in the stockbroking industry that such partners are generally preferred by various stockbrokers. This includes a degree in accounting, finance, economics or business. If you have a master degree in any of such subjects, then you will be recruited in even higher-level positions.

This implies the compensation which you will get in such a position will exceed that of a person who has done the only graduation.

It doesn’t imply that you have to carry out all the business operations on your own with such educational qualifications. You will be trained to carry out your functions smoothly. It is just that having such qualifications along with skills related to problem-solving, decision making and taking initiatives, enhances the chances of your success in the business venture.


Sub Broker Exam Types

The sub-broker exams are carried out by NISM (National Institute of Securities Markets) which is basically an educational institute established by SEBI (the stock market regulatory body) in the year 2006. It is based out of Khalapur, Maharashtra.

There are two types of NISM certifications which you need to get, to become any stockbroking firm’s sub-broker. These are explained below:

NISM-Series-XI exam:

This is a voluntary sub-broker exam which is also referred to as the Equity Sales Certification Examination. It requires you to possess a valid PAN card to appear for the exam. You should have a general understanding of the equity sales so that you can easily grasp the things which occur in the equity markets, and provide better services to the investor.  

This will ultimately enable you to be efficient in the operational processes and handle the risks in a much better way.

What needs to be prepared?

You need to thoroughly study the Indian equity market, the risks, returns and taxes related to it. You should also have clarity of concepts such as clearing, settlement, and management of risks during the operational processes of the equity market.

In general, if you clear this exam, it will be understood that you possess a strong knowledge about the operation of the equity market in India. So, even if you do not have a good grasp of all these, you need to study them thoroughly to get this certification.

Details of the test structure:

A fee of ₹1770 along with service tax and payment gateway charges has to be paid for appearing this exam which lasts for 2 hours. There will be 100 questions, each carrying 1 mark. A minimum of 50% has to be scored in order to get this certification and it will remain valid for 3 years. You should know that 25% of the total marks for a question is the negative marking in case your answer is wrong.

NISM-Series-VIII exam:

This is otherwise known as the Equity Derivatives Certification Examination which gauges your knowledge as the trading member’s approved user or sales personnel in an equity derivative segment.

What needs to be prepared?

You will have to study different derivative products offered by the derivative markets, the regulations as well as risks associated with them, and the exchange mechanism of clearing and settlement. It is necessary to be well aware of various rules and regulations on the basis of which the Indian securities market operate.

Knowledge regarding different strategies that you can build with the futures and options on the stock and stock indices is needed.

Details of assessment structure:

The fees for this exam is ₹1500 along with extra payment gateway charges. It is of 100 marks with a duration of 120 minutes, each questions carrying 1 mark and 0.25 negative mark for a wrong attempt. But unlike the previous one, its pass percentage is 60 and the certificate remains valid for 3 years.

In any of the two exams, it is necessary to provide your updated Income tax Permanent Account Number during the registration, in order to get the passing certificate.

Apart from these exams, here is a quick look at some of the modules that you need to study while preparing to become a sub-broker for any prominent stockbroking company:

Basic Module

Basics Module
Financial market Interest rate derivatives Clearing settlement and Risk management
Mutual fund Commercial banking in India Banking fundamentals- Internationals
Currency derivatives FIMMDA- NSE debt market Capital market fundamentals- International
Equity derivatives Securities market

Intermediate Module

Intermediate Module
Capital market dealer module Options trading strategies Insurance module
Derivatives market dealer module Operations risk management Macroeconomics for financial markets
Investment analysis and portfolio management Banking sector module NSDL- Depository operations
Fundamental analysis module Treasury management module Commodities market module
Back office operations module Merger and Acquisition module Surveillance in Stock Exchanges module
Wealth management module Venture capital and private equity module Technical analysis module
Project finance module Financial services foundation NSE Certified quality analyst module

Advanced Module

Advanced Module
Business analytics module Investment Banking module- International International Financial Reporting Standards (IFRS)
Information security services professionals Derivatives market module Equity research module
Algorithmic trading module Mutual funds module Issue management module
Financial market module Options trading module Market risk module
Securities market module Financial modeling course

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More on Sub Broker Basics

If you wish to learn more about basics around sub-broking, here are a few reference articles for you:

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