Investors can soon carry out stock market transactions even while on the move, as the Securities and Exchange Board of India on Friday cleared the way for use of wireless technology in securities trading.
Investors can transact in securities through their mobiles or wireless Internet devices such as laptops with data cards, if they have an online trading account with their brokers, SEBI said in a circular.
This brings to an end the long wait for broking houses and wireless service providers who have been ready with the necessary technology for some time now.
Approval
Many of the bigger broking firms have the systems already in place, and all that remains is approval from the stock exchanges. Kotak Securities, Angel Broking, Geojit BNP Financial Services and Motilal Oswal Financial Services are some of the brokerages who say they are ready to offer wireless trading.
“We are fully prepared and ready to launch the service; and once we get approval from the exchanges, we can start the application within days,” said Mr Vinay Agrawal, Executive Director, Equity Broking at Angel Broking.
Typically, an investor with a GPRS-enabled mobile phone, will be able to download the facility (provided by his broker) to his handset, said Mr D. Kannan, Managing Director, Kotak Securities. “The user can trade through the handset thereafter,” he explained. “Currently, investors can at best check share prices on their handsets.”
“There are approximately 63 crore mobile phone users in the country, five crore Internet users and a little more than a crore of investors in the stock market. Mobile phones will increase penetration of securities trading in the country,” said Mr Vinesh Menon, Deputy CEO, Online Investments and Stock Broking at Bajaj Capital.
Detailed guidelines
Operational clarity will be available once exchanges come out with detailed guidelines, said Mr. Vishal Gulechha, Head of Online Broking, ICICI Securities.
Consumers are already paying bills, doing pre-paid recharges and the like using mobile phones, said Mr Deepak Chandnani, President at Obopay Inc, which creates software for mobile applications, including trading. “With less than 2 per cent of Indians investing in equities, mobile trading will certainly open up a huge market,” he said.
SEBI has asked brokers to ensure that investors are provided secure access, encryption and security of communication for Internet-based trading, and securities trading using wireless technology.
It has also asked that adequate measures should be taken for user identification, authentication and access control, using means such as user-ID, passwords, smart cards, biometric devices or other reliable means, to prevent the misuse of the facility. The unique identification number as given in the case of Internet-based trading, would be made applicable for wireless trading, too.
Mr Menon of Bajaj Capital said that the costs incurred by the broking firms for offering wireless trading would be a one-time cost, and not a very large one either.
SEBI, in its release, said that the exchange should make the “necessary amendments to the relevant bye-laws, rules and regulations” to enable wireless trading.
