Important: Discontinuation of Payouts for Referral Program on Dhan

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It’s Annual Maintenance charges that Authorised Person need to pay every year. NSE charges Rs. 5000/- for all segments & BSE charges Rs. 4000/- for all segments. Apart from this MCX also charges Rs. 1000/- per year. So total you’ll be paying Rs. 10000/- plus GST every year to exchange once you register yourself as Authorised Person.

For order placement of your client on his/her behalf you need terminals for all segments. Discount Brokers like Dhan, Zerodha etc they don’t provide terminals to their sub-brokers/AP. That’s why I said that the AMC charges should be appicable only for those who take terminals, not every Authorised Person.

But here exchange has mandated every AP needs to pay AMC. This is bit strange. That’s why I said in last post “”“Dhanda Karna Hai Toh Hafta Dena Padega”“”.

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Thanks. I have two questions for Team Dhan @PravinJ @Naman.

  1. Will Dhan retain the same share of the brokerage (or give more) once we become Authorised Person?

  2. Will the clients whom we referred to Dhan be retained along with the new ones?

Personally, i feel that this extra fees to be paid by the AP will further encourage the APs to push their clients/referees to trade more because they have to recover their investment. If the aim was to discourage traders to encourage their friends or referees to trade more, this new policy will even push them to urge their ‘clients’ to trade more.

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Hi @thetribaltrader Please connect with our team on this. Additionally, AP program is not for all users - it takes a while to build a channel network business.

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Yes, running a compliant AP business is not as cheap or easy as sharing the referral link and earning 20% commission earlier from an individual account.

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What are all the compliances/charges you incur, in order to run your AP business? Just curious :slight_smile:

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@VijayNair

  1. Every year pay nearly 30K to exchange
  2. Set up an office space that should not be used for any other activity. Rental cost incurred.
  3. All other incidentals of running a business like administration, accounting, taxation and promotional activities are additional.
  4. Maintain registers for visitors, grievances etc
  5. Periodic compliance checks from broker. Surprise inspection can happen from anyone from broker to regulator.
  6. Shouldn’t be inactive for more than 6 months. If it happens registration is cancelled.
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Woa…thanks for this info. By the way, do you have to be Sebi registered financial adviser? How to run this business? :wink: I am really curious since Sebi could also penalise those APs who may want to earn more by teaching or guiding new traders. Are teaching/offering courses allowed?

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No other revenue stream allowed for APs (accepting money for any other services from clients)

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Hmm, so looks like these compliances/costs/restrictions will discourage most that were in the referral program

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Yes, AP program is not for individual users. We are trying to build one that will be beneficial to existing users of Dhan.

Word of mouth was a the biggest source of traders and investors getting to know and discover Dhan. So yes, even we are disappointed that we had to shut it down abruptly :broken_heart:

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For APs this is good news. Earlier AP used to put in the time, effort and money to get clients on boarded to the broker. Then the client sees that there is referral commission if he refers another client. So he opens an account in his wife, parents name under his referral. Client trades with this account to pocket the 20% commission. Win Win for the broker and client. AP loses out.

Also this referral scheme was used by Finfluencers to sell dreams and hope. Someone is opening shop to sell hammer candle, someone is selling MACD, someone is selling straddles and strangles…:laughing: Watt bas retail ki hi lag rahi dhi.

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@PravinJ In such a short period, you’ve achieved a lot compare to other start-ups into fintech industry. I also read the Care ratings report on Moneylicious. It’s good to receive BBB- Stable category in such a short span. Also profitable in FY24 against the net loss in FY23.

But there was one line mentioned in Care report and that is - The Company has been focusing only on broking business. Do plan to enter into Mutual Fund Distribution, Fixed-Deposit, Online Bonds Platform, AIFs, SDIs and allow your partners to distribute. They can bring more business than direct acquisition.

Mutual Fund Distributors like me do look for online platforms to distribute Mutual Funds and other products but currently the sharing offered by these platforms discourage us to distribute. For Micro investors it is the best way of savings and they do need advice about where to invest. If possible, do launch a Distributor platform where the MFDs can be onboarded and it will definitely contribute into the revenue of company.

Well I have many things to suggest but since I am not registered as AP, I would be more happy to suggest in Partners meeting.