SEBI Suggests Tech-Based Methods To Prevent Illicit Transactions In Investors' Demat Account
SEBI Suggests Tech-Based Methods To Prevent Illicit Transactions In Investors' Demat Account
Seeks comments from the public by 11 March
The Securities and Exchange Board of India (SEBI) is considering strengthening authentication for trading accounts through a SIM binding mechanism.
It would mean, one Unique Client Code (UCC)-One Device-One SIM, like UPI payment applications where the app recognizes the SIM along with the mobile device and bank account details for transactions.
It will comprise SIM and device recognition, biometric authentication, and QR code logins for enhanced security.
Initially, the top 10 Qualified Stockbrokers will implement the measures, which will eventually be mandatory for all stockbrokers to prevent unauthorized transactions. However, in the beginning, it will be optional for the investors.
SEBI’s consultation paper read, "The authentication mechanism for accessing the trading account has to be strengthened to ensure that only authorized users can execute the trades.”
Similarly, login into the trading account will happen only when the trading app recognizes the UCC with the SIM and mobile device.
The capital market regulator has suggested linking a mobile device with the registered mobile number (SIM) and IMEI number to the client's UCC. Biometric authentication would be required on the primary SIM-bound device for login into trading apps.
For desktops or laptops, a time-sensitive and proximity-sensitive QR code authentication will be used like on social media platforms.
It intends to set up a backup system to allow clients to continue trading if they lose or change their device.
The proposed framework includes provisions for SIM binding, biometric authentication, login from multiple devices, family account operations and the facility of temporary lock-in of trading accounts.
Meanwhile, access to trade will be strengthened when investors opt for a call and trade/walk and trade facility.
