Sub broker for Zerodha

Zerodha
1

Hello

Just wanted to ask a quick question here regarding being a sub broker for Zerodha or any other broker for that matter.

I have a few HNI clients , capital is around 5 cr.
I place anywhere around 200 trades a day in options trading ( iron condors and iron butterflies )

So in this case I’ll be generating;(200*160) ₹32,000 in brokerage , of which 70% will be distributed to the sub broker.

My question is , if I’m able to generate consistent brokerage for Zerodha while placing these high frequency trades , am I still obligated to bring in new clients every quarter - can we have a negotiation regarding minimum number of daily trading value rather than bringing in new clients every quarter ? ( I’m still profitable while placing 200 trades per day , so the client still gets a good ROI , so there’s no ethical dilemma there ).

@nithin

2

Firstly this isn’t allowed @Karan23. A sub-broker or authorized person can’t place orders unless it is explicitly authorized by the customer. A customer recording asking to place an order is required if you are using a dealing terminal. Quasi portfolio management this way is an issue, and any complaint by your customer can potentially lead to SEBI taking action.

We don’t offer any dealing terminals to our partners, customers have to place orders independently, and partners can only introduce customers to us. If you plan to do only that, you should talk to our partnership team, you can email [email protected].

3

@nithin

If I tell my clients to place orders independently from their own end then I’m assuming that’s allowed.

But my question is , will I be allowed to do this and not bring in new clients , as long as I keep generating consistent brokerage for you ?

4

Best to talk to our partner team about this. I think it should be okay as long as you actively support the clients you have introduced.

5

By support the client you mean putting the clients needs as the priority over the business needs correct ?

Also one more question ,

Are sub brokers allowed a profit sharing ratio with clients ? If not allowed in Zerodha then is it allowed anywhere else - maybe the traditional brokers ? @nithin

6

I mean offer general support to the customer in terms of explanation of our product and offerings.

Not allowed. Also there the entire concept of sub-brokers was removed by SEBI many years ago. Today you can at best be an authorized person of a broker.