Online trading might soon come with an extra layer of security. The Securities and Exchange Board of India (Sebi) has proposed linking trading accounts to SIM cards and making biometric authentication mandatory. The idea is to curb unauthorised transactions and protect investors from fraud.
With more people using web and mobile platforms to trade, security breaches have become a growing concern. Sebi has pointed out an increase in hacking attempts, identity theft, and SIM card spoofing, where fraudsters divert OTPs to access accounts illegally.
To tackle this, the regulator has set up a working group and released a consultation paper seeking feedback on a new security framework. One key proposal is SIM-binding, similar to what’s used in UPI transactions. This means a trading account will be linked to a specific mobile number, device, and unique client code (UCC).
Under this system, an investor's mobile device will need to be registered and hard-bound with the SIM to log in. Sebi believes this could act as a strong security layer, ensuring only authorised users get access.
Another big change is biometric authentication. Logging in to a trading account may soon require fingerprint or facial recognition, making it harder for unauthorised users to break in.
The proposal also allows investors to use multiple devices, but with restrictions. Only one active session will be allowed at a time, and logging in from another device—like a laptop—will require a QR code-based, time-sensitive authentication. Investors will also have more control over their accounts, including options to temporarily lock them, monitor active sessions, and set trade parameters like volume and price bands.
For families managing multiple trading accounts, there’s some flexibility. Sebi suggests allowing multiple UCCs to be operated from a single mobile device, but with proper authorisation in place.
The security measures will be rolled out in phases, starting with the top 10 qualified stockbrokers (QSBs). Initially, investors can opt in voluntarily, but it might become mandatory down the line.
For now, Sebi has invited public feedback on these proposals, with a deadline set for March 11. Investors and market participants can weigh in before any final decisions are made.
(By arrangement with livemint.com)
