The Securities and Exchange Board of India (Sebi) on Friday issued guidelines for securities

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trading using wireless technology using mobile phones and laptops with data card, paving the way for a host of brokerages including Kotak Securities, Geojit BNP Paribas, Motilal Oswal Financial Services, among others to all its clients to buy and

sell securities on the move.

The regulator asked the stock exchanges to ensure that brokers comply with secure access, encryption and security of communication for internet based trading and securities using wireless technology. 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 misuse of facility by unauthorised persons.

Financial Chronicle in its August 20 issue broke the story about the Sebi’s technical advisory panel giving its clearance for securities trading through wireless technology.

“We already have enrolled 10,000 clients, who are now able to monitor stock prices and NSE’s index level through our `MarketWatch’ product on their mobiles. These clients can immediately come to the mobile trading facility, once we get the permission,” said C J George, managing director, Geojit BNP Paribas, a leading retail brokerage.

According to Sebi, unique identification number as given in case of internet based trading shall be made applicable for securities trading using wireless technology. In case of failure of the wireless network, alternative means of communication for placing orders should be available.

“We have been working on the product for sometime now. We will be initially offering mobile trading facility to all our existing clients,” said D Kannan, managing director of Kotak Securities.

The capital markets regulator asked stock exchanges to ensure that brokerages incorporate additional provisions specifying possible risks, responsibilities and liabilities associated with securities trading using wireless technology in the broker-client agreement. Or this should be brought to the notice of clients, who are desirous of availing such facility, and taking their concurrence on the same.

“The security features incorporated by Sebi are strong and compares well with those in developed markets,” said Kannan.

As it may not be possible to give detailed information to the investor on a handheld device e.g. mobile phones, brokerages should ensure that minimum information may be given with addresses of the internet website/web page where detailed information would be available.

Sebi said order confirmation should be provided to the user on submitting the order. Order modification/cancellation facilities should also be provided. Trade confirmation should be provided to the user, along with history of trades for the day.

Session login details should not be stored on the devices used for internet based trading and securities trading using wireless technology. Network security protocols and interface standards should be as per prevalent industry standards and sound audit trails should be available

Venkat Rangan, co-founder & CEO of Chennai-based INXS Technologies, said it was in talks with several broking firms to provide the technology for mobile trading. MarketSimplified, its parent firm, is a leading player in this business in the US, powering top online brokers such as TD Ameritrade, OptionsXpress, FXCM, ChoiceTrade.

“There are 500 million mobile users as compared to just 10 million broadband users. We see mobile trading as a huge opportunity,” said Rangan.