SEBI Proposes New Measures to Secure Investors’ Trading Accounts
The Securities and Exchange Board of India (SEBI) has proposed a series of technology-driven measures to enhance the security of investors’ trading and demat accounts. These steps aim to prevent unauthorized transactions, identity theft, and fraudulent activities, ensuring a safer trading experience for investors.
Key Proposals:
1. SIM Binding for Secure Access
SEBI has suggested implementing a SIM binding mechanism, where a trader’s Unique Client Code (UCC) is linked to a specific SIM card and mobile device. This measure will ensure that access to a trading account is only granted when the registered SIM and device match the credentials stored with the broker. This system mirrors the security measures used in UPI-based transactions.
2. Biometric Authentication
To further strengthen security, SEBI has recommended using biometric authentication, such as fingerprint and facial recognition, during login. This will add an extra layer of protection against hacking and unauthorized access. Biometric verification has been widely adopted in banking and financial apps, making it a reliable security feature for trading platforms.
3. Centralized Communication for Trade Execution
SEBI has proposed that trading transactions should only be allowed through registered and centralized communication channels. This means that investors will only be able to execute trades via designated phone numbers, email addresses, or mobile numbers that are pre-registered with their broker. This step aims to prevent unauthorized trading requests made through unverified communication methods.
4. Temporary Account Locking Feature
To prevent unauthorized activity, investors will be given the option to temporarily lock their trading accounts when not in use. This feature will help mitigate risks associated with dormant accounts, reducing the chances of fraudulent transactions occurring without the investor’s knowledge.
Why These Measures Are Necessary
These proposals come in response to rising concerns over cybersecurity threats in the stock market. Cases of unauthorized access, phishing attacks, and identity fraud have increased in recent years, prompting SEBI to introduce advanced security mechanisms. By implementing these measures, SEBI aims to enhance investor confidence and protect the integrity of the Indian securities market.
Seeking Public Feedback
SEBI has invited suggestions from stakeholders, including investors, stockbrokers, and financial institutions, on these proposed security measures. The regulator has set March 11, 2025, as the deadline for submitting feedback.
These reforms reflect SEBI’s commitment to ensuring a secure, transparent, and investor-friendly trading environment in India’s financial markets.
