The quickest way of making — or losing — money on the stock market will open up when the Securities & Exchange Board of India (Sebi) permits investors to trade using their handsets. The regulator has just taken the first step.
On Thursday Sebi announced on its website that it would see if its trading framework on the internet could be extended to wireless technology. Such trading will, of course, be subject to several safeguards and rules. Sebi invited comments from market players on the rules by June 15.
The tentative rules will allow only registered stockbrokers, with internet- based trading services, to extend the facility to handsets. “A broker/ member who desires to provide trading through the wireless medium will be required to take approval from the stock exchanges,” Sebi said.
All requirements applicable to internet- based trades will also apply to trade on handsets.
Anup Bagchi, executive director of ICICI Securities, described it as a “path- breaking” policy that, riding on the telecom boom, would aid “democratisation of access to the equity market.”
For safeguards, Sebi prescribed secure access, end-to-end encryption and security of handset- to- server communication. User identification, authentication and access control could be ensured with user ID, passwords, smart cards and biometric devices to prevent misuse.
Sebi said network security protocols must be as per prevalent industry standards and sound audit trails must be available for all transactions through handsets.
Information sent to handsets should be timely and not put the users at a disadvantage vis-à-vis other means of communication. Order confirmation, modification or cancellation must be provided to the investor, who must also get trade confirmation, along with history of trades.
In case the network fails, alternative means of communication such as telephone or internet should be available, Sebi said.
When Sebi finally allows stock trades on handsets, it will add substantially to mobile commerce, which is still in its nascent stage in India. Though payments through handsets are picking up, mobile commerce is nowhere near that of some smaller Asian countries. India has nearly 300 million mobile subscribers and the growth has been between 10 and 13 million every month.
Manoranjan Mohapatra, Comviva Technologies (earlier Bharti Telesoft) CEO, said, “The Sebi move is encouraging to the mobile industry. The contribution M-commerce to value- added services (VAS) is still low.”
Industry estimates put the VAS market at Rs 5,780 crore, which is projected to grow to Rs 16,520 crore by 2010.
M-commerce includes monetary transactions like payment of bills, movie tickets, shopping and sending gifts.
Gagan Chadha, CFO of ValueFirst Messaging, welcoming the Sebi step, said, “M-commerce is a great tool. We are already talking to mutual funds and brokerages to to facilitate payments through handsets.”
