Sebi Proposes Tech Measures for Secure Demat Accounts

New Delhi, Feb 18 (PTI) To create a secure trading environment, markets regulator Sebi on Tuesday proposed to strengthen authentication using a SIM binding mechanism with mobile devices and the client's UCC similar to that of UPI payment applications.

"The authentication mechanism for accessing the trading account has to be strengthened in order to ensure that only authorized users could execute the trades," Sebi said in its consultation paper.

Sebi has proposed to strengthen the authentication by way of SIM binding mechanism -- One UCC-One Device-One SIM-- similar to that of UPI payment applications where the UPI application recognizes SIM along with mobile device and bank account details for carrying out UPI transactions.

Similarly, the log-in into the trading account can take place only when the trading application recognizes the UCC along with SIM and mobile device.

Sebi has suggested linking a mobile device with the registered mobile number (SIM) and IMEI number to the client's Unique Client Code (UCC). For log-in into trading apps, biometric authentication would be required on the primary SIM-bound device.

To log in on other devices like desktops or laptops, a time-sensitive and proximity-sensitive QR code authentication will be used, similar to log-ins on social media platforms.

Additionally, a backup system will be set up to allow clients to continue trading in case they lose or change their device. The proposed framework includes the provisions with respect to SIM binding, biometric authentication, log-in from multiple devices, family accounts operations, facility of temporary lock-in of trading accounts etc.

Further, the access to trade has been proposed to strengthen in cases where investors opt for call and trade/ walk and trade facility. The proposed provisions will be applicable to all the stock brokers in a phase manner, with initially, top 10 Qualified Stock Brokers required to implement the same.

To begin with, it would be made optional for the investors to opt for the proposed secure authentication mechanism.

Subsequently, in a phased manner, the proposed framework would be made mandatory to access the trading account. The proposals are aimed at creating a secure trading environment and to prevent unauthorized transactions in trading and demat accounts.

The Securities and Exchange Board of India (Sebi) has sought public comments till March 11 on the proposals.