Broker strength falls 40% on compliance burdens

Brokerage firms are facing a 40% decline in strength due to increasing compliance burdens, prompting regulatory action to tighten regulations for authorized persons (APs).

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"BECOMING AN AP allows us to retain our clients while earning commissions on brokerage revenues," he said.

Chordia termed the arrangement a win-win, adding that "clients continue to get services from the same person as before while getting access to superior technology platforms and products".

However, the increasing number of APs has created a new problem for the industry as well as the markets regulator—there are more instances of APs engaging in unauthorised trades, promoting unregulated products and offering assured returns to lure clients.