Sub-brokers, those much-maligned intermediaries of the stock market who lost investor trust after the 2001 scam, have rechristened themselves in a regime where their playing field has also drastically changed.

These days, they prefer to be called 'channel partners.'

Their playing field is also tightly monitored now. Says an official of Birla Sunlife Securities: "In the case of a sub-broker, the entire risk management system depends on him. But in case of channel partners, the risk is directly under our control as all the contracts go through us."

Sub-brokers got a bad name as they made a mess of risk management norms. During the March 2001 stock market crisis, several sub-brokers duped investors by not maintaining proper books and contract notes.

But channel partners are not committing the same mistakes. They are savvy and more sophisticated in their approach.

Says Motilal Oswal, chairman and managing director of Motilal Oswal Securities: "A channel partner is an effective tool as it gives us an effective local business through local people with better risk control." The brokerage firm has around 160 channel partners across 110 cities.

In the official terminology of the Bombay Stock Exchange, a channel partner is known as 'remisiers.'

"In order to provide an additional service to investors, the exchange has introduced a concept of remisier. Remisier is an entity which brings business to the member-broker and gets commission for the same," the BSE has said on its Web site. There are 484 remisiers with the exchange.

On the National Stock Exchange, the official term is 'authorised person.'

"Clients introduced by the authorised person will have a direct relationship with the trading member and the authorised person shall not be allowed to have any trading relationship with the clients," NSE said on its Web site. As on June 4, 2003 there were 4,329 'authorised persons' registered with the exchange.

Sunil Shah, managing director, HDFC Securities, points out that the average commission for a channel-partner ranges between 30 per cent and 40 per cent. This is a new way of expanding business.

Says Jaideep Arora, director, Sharekhan.com: "Today, people are more informed and aware of the markets. What they need is a whole range of services under one roof with a major emphasis on service. Relationship management is very important and each customer's needs has to be catered to personally. This is where the channel partners come in."