Summary 

Revenue sharing is an essential factor to consider when working together with a stockbroker as an Authorized Person (AP). It will help you estimate your income and expenditure by knowing how the remuneration is determined and what deductions are to be considered. In 2026, those looking for partners should also assess business factors apart from technology and operational factors.  

Key Insights 

1. The revenue sharing will be based on the agreement signed by the stockbroker and its AP.  

2. The earnings will be dependent on the eligible brokerage, sharing percentage, and contractual deductions.  

3. The commission for products will have to be separately evaluated and handled. 

4. Safety Deposit, payment schedule, and termination clause need due consideration.  

5. Client retention, operational costs, and other issues need to be taken care of along with the revenue generation. 

Revenue Sharing: Key Business Factors (September 2026) 

Business factor	What to check	Why it matters
Revenue share	Agreed percentage and calculation basis	Clarifies the remuneration structure
Deductions	Eligible charges and adjustments	Helps estimate payable amounts
Payouts	Payment cycle and reconciliation process	Supports cash-flow planning
Client activity	Active clients and eligible brokerage	Helps assess business performance
Agreement	Deposit, termination and refund clauses	Clarifies contractual obligations

This is a business-planning checklist, not a set of industry benchmarks or regulatory requirements. 

What Is a Revenue Sharing Model in Stockbroking? 

The stockbroker revenue sharing model is basically a way in which the broker pays his business associate for the services provided within the framework of the agreement. 

Understanding the Authorised Person and Sub-Broker Setup 

SEBI terminated new sub-broker registrations from 2018, and all registered sub-brokers had to shift to the AP or trading-member system by March 31, 2019. APs are nominated by the stockbroker and must receive exchange approval. The contract between the broker and AP details their roles and payment arrangements. 

Why Brokers Share Revenue? 

The structure can be beneficial for both parties, where the broker may gain more clients through APs, and APs have the ability to build up the relationship with the clients and offer permitted assistance. 

Core Types of Stockbroker Revenue Sharing Models 

Fixed vs. Tiered Percentage Models 

A fixed scheme uses a set rate on an eligible revenue pool. A tiered scheme can vary by the rate depending on whether contractual levels or revenues have been achieved. Determine the requirements prior to making any estimates. 

Equity-Only vs. Multi-Asset Arrangements 

Certain schemes deal with particular trading divisions, whereas others may involve several eligible divisions. Be sure to know what is covered. 

Flat-Fee vs. Percentage-Based Models 

The structures used in the business vary from one broker to another. It is important not to make assumptions where certain structures apply based on the type of the broker.  

How AP Commissions Are Calculated 

The sub broker commission structure should clearly identify the revenue base, adjustments and payment conditions. 

1. Calculate eligible brokerage: Identify brokerage attributable to eligible client transactions across covered segments. 

2. Review deductions: Distinguish brokerage from statutory charges such as securities transaction tax (STT), exchange transaction charges, GST and applicable regulatory fees. These charges have different treatments and should not automatically be treated as deductions from brokerage revenue. 

3. Determine the eligible amount: Apply to the agreement’s definition of distributable brokerage or revenue, including any permitted adjustments. 

4. Apply the agreed share: Multiply the eligible amount by the applicable rate and reconcile it with the broker’s statement. 

For illustration, if the contractually eligible revenue is ₹1,00,000 and the agreed share is 30%, the indicative share is ₹30,000 before any additional contractual adjustments. This is a hypothetical example, not a standard market rate. 

What Determines an AP’s Revenue Share? 

The authorised person revenue sharing terms may depend on negotiated commercial conditions, expected business volumes, infrastructure responsibilities and the services provided. Consider these factors: 

• Initial investment: Office expenses, connectivity, staffing, and any security deposit. 

• Client activity: Active clients and eligible brokerage generated. 

• Business potential: Local demand, client acquisition capacity, and service quality. 

• Experience: Relevant experience and operational capabilities, where considered by the broker. 

There is no single standard percentage applicable to every AP. The AP commission in stock market arrangements must be assessed against the actual agreement. 

Revenue Opportunities Beyond Equity Trading 

There are also other permissible activities that may be undertaken, and each activity has various eligibilities and commercial considerations. 

• Mutual Funds and SIPs: Remuneration payment shall be as per the guidelines and agreements. 

• IPOs and Corporate Fixed Deposits: Permissible activity needs to be determined, product terms and distribution agreement. 

• Insurance & Wealth Products: Various authorizations and distribution arrangements would need to be undertaken based on the product type. 

• PMS & AIFs: Both the products have various rules and are not necessarily distributable under all agreements. 

• Margin Trading Facility (MTF): Partner remuneration for the product shall be covered under the agreement. 

What to Check Before Signing an AP Agreement 

Review the sub broker revenue sharing model offered by the broker in detail before committing funds. 

• Deductions: Find out how deductions, chargebacks, and reconciliations are made. 

• Payouts: Get details on when payments will be made and minimums required, as well as dispute resolution mechanisms. 

• Client attribution: Learn about client tagging, transfer of clients, and other pertinent contractual clauses. 

• Deposits and termination: Look for terms and conditions related to refunds, notice period, renewal, and termination. 

How Stockbrokers Can Support AP Partners 

Consider the stockbroker revenue share percentage along with the services offered by the broker. Some help could be offered by partners through dashboards, CRM, online onboarding, training, the back office, and marketing materials. All these are offered by different brokers, so check for availability first. 

Strategies to Improve Business Earnings 

1. Retain to the customers by providing fast services and proper communication.  

2. Utilize education marketing as well as legal community marketing for appropriate customers. 

 3. Track active customers, costs of customer acquisition, eligible income, operational costs, and complaints.  

4. Expend efforts on areas where appropriate permission and planning are done. 

Final Thoughts 

For any sustainability of the stockbroking partnership, transparency in business dealings, excellent operational conduct, customer service, and compliance with regulations are critical. It is important to analyze the contract, determine the requirements of the exchange and see how much money you can make from the venture. 

Note well: The information provided here is general in nature. Do your due diligence to verify your current requirements and terms of contract.