SEBI Introduces Tech-Based Measures To Thwart Misuse
Strap – States that due to lack of control, the web and mobile-based trading platforms were prone to hacking
The Securities and Exchange Board of India (SEBI) has proposed technology-based measures to create a safe environment and prevent unauthorized transactions in investors’ trading and demat accounts.
The authentication would be via a SIM binding mechanism – One unique client code (UCC)-One Device-One SIM like UPI payment applications, where it recognizes the SIM with the mobile device and bank account details for UPI transactions.
Similarly, the login into the trading account will happen only when the trading application recognizes the UCC with the SIM and the mobile device.
SEBI also suggested biometric authentication, login from multiple devices and the facility of temporary lock-in of the trading account.
The capital market regulator’s discussion paper stated that a call and trade facility to a stockbroker or an authorized person would be allowed only through centralized dedicated phone numbers, email addresses and mobile numbers of the stockbroker.
It explained, “Due to innovative technological tools, the instances of gaining unauthorized access to trading accounts, SIM spoofing (to divert OTPs), unauthorized account modifications and erroneous transfer of shares have been noticed lately.”
Due to a lack of adequate technology-based controls, the web-based or mobile-based trading platforms were prone to hacking, identity theft and fraud, SEBI asserted.