Approved user

A trading terminal does not trade by itself. Someone has to sit at it and enter orders. That someone has to be qualified first.

An approved user is that qualified person. Every trading member must appoint at least two approved users who have passed a SEBI-approved certification programme. Only these approved users are permitted to operate the firm's derivatives trading terminal — nobody else at the firm, however senior, may key in an order on it without that certification.

The rule sits among the eligibility criteria for membership of the derivatives segment (Chapter 8, section 8.5): every trading member must appoint at least two approved users, each of whom has passed the certification programme approved by SEBI. The certification requirement also covers members and sales persons more broadly, but the approved user is the one actually cleared to operate the terminal.

An approved user is distinct from the corporate manager hierarchy on the same terminal (Chapter 6): corporate manager, branch manager and dealer are levels of access and reporting within a trading firm's own system, while "approved user" is the SEBI-linked qualification that must sit behind whoever is allowed to trade at all.

ABC Securities Ltd becomes a trading member of the derivatives segment. Before it can place a single order, it must put forward at least 2 staff members who have cleared the SEBI-approved derivatives certification.

Suppose only one dealer, Rahul, has passed the exam. ABC Securities cannot yet operate — it must get a second employee certified before the firm can run its terminal with the minimum of 2 approved users the rule requires. Once a second employee, Priya, clears the certification, both Rahul and Priya can operate the terminal as approved users; a third, uncertified employee still cannot.

Chapter 8, section 8.5 (Eligibility criteria for membership on derivatives segment), lists the certification requirement and the minimum of two approved users per trading member as one of three eligibility heads, alongside net worth and liquid net worth. Chapter 8, section 8.3, repeats the same requirement as part of the L. C. Gupta framework. Expect a question naming the minimum number of approved users a trading member must appoint.

• At least two approved users per trading member — not one, and not "as many dealers as the firm employs."
• Only approved users may operate the trading terminal. Passing the certification is what makes someone an approved user; simply being an employee of the trading member is not enough.
• Do not confuse "approved user" with the corporate manager / branch manager / dealer hierarchy — that hierarchy is about internal reporting and exposure limits, not about who is legally permitted to key in an order.