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SEBI gears up to introduce Equity Trading Through Mobile Phones Soon

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SEBI is doing its best to be in sync with the dynamically changing marketplace.Off late, SEBI has introduced quite a few reforms in a bid to increase the volumes in the Indian Stock Market and make it easy for investors to trade.From increasing the trading hours to introducing trading of Mutual Fund’s through brokers, all the reforms have been aligned to make the Indian Markets more investor friendly.

Mobile_trading_SEBI

In what can be a path breaking initiative, SEBI is finalizing the norms for introducing Equity Trading through Mobile Phones.Take that for keeping  pace with the environment.The move is significant for the fact that Indian Mobile market is growing at a tremendous rate with millions of subscribers added each month.With a growing traction towards Mobile Internet and Mobile banking , it is evident that people are confident about doing monetary transactions on their phone.If SEBI can ensure the security issues with the mobile trading software, it could definitely lead to increased trade volumes on the bourses.

While SEBI is doing due diligence in finalizing the operational guidelines, the market participants are keen to see mobile trading launched.However, they are in no hurry and want the regulator to ensure the security aspect.

“Since this is a new product, the regulator is carefully examining the software and security features to build up a comfort level in the market”. (Source)

To visualize the impetus that Mobile Trading can provide to the depth of the market, a comparison with Online Trading provides some interesting insights.Online trading presently constitutes 15-20% of the traded volume.A ball park estimate of the total Internet subscribers in India would be around 50 million.Now, compare that with more than 550 mobile subscribers.Out of these, more than 120 million subscribers use their mobiles to connect to the Internet and quite a few who use Mobile banking too.Now, if the mobile trading software is able to convince the investors on the safety and security aspect of transactions, it could lead to a considerable increase in trading volumes.

On a personal front, I would love to see the mobile trading launched.Most of the offices block Online Trading sites.So, the only option to trade the market is via the broker on the phone which can be taxing at times.With mobile trading launched, people like me will be in complete control of their stock market transactions without the need to catch hold of a broker.

The Indian Stock Markets are sure heading in the right direction as far as the strategy is concerned.There is a considerable traction for Mobile Trading in countries like U.S.  Japan etc.The only thing to watch out for will be execution.If the mobile trading platform does not compromise on the security of transactions , i am sure it will lead to increase retail investor participation.

What are your thoughts on Mobile Trading? Would you prefer to trade through your mobile phones or you think it is too risky an option to opt for?

  1. […] weeks back, National Stock Exchange (NSE) announced that it will soon support Mobile trading – Following its footsteps, even Bombay Stock Exchange […]

  2. Madhav Shivpuri says

    Ankit,

    Security as an aspect of mobile trading is very important and glad to see that it is being addressed. I would worry from a small investor perspective. This is related to the frequency of trades from retail investors who may not be very qualified or knowledgable about the markets and burn their fingers trading on market pundit’s calls or by watching biz news. Although it might look cool in front of (girl) friends, irrespective of the buy/ sell actions, one needs to consider the motives for investing/ trading, higher taxes (higher for frequent churning), brokerage charges etc.

    So, if there is one beneficiary from this arrangement – it is the broker. Frequent trading will mean they make their cut on both buy and sell orders. Their risk has not increased, nor has their overheads. So, if IciciDirect or other brokers were listed companies, I would be buying their stock now!

    1. Ankit says

      Very interesting insights Madhav as always:-)

      Yes, there is a tendency for the retial investor to make instant moves listening to so called market experts and biz new.However, the use of tech has to be treaded with caution.It will come in handy when u want to place Buy/Sell calls even when u r on the move or stuff like that.
      Know what, after watching ‘Bolier Room’ i am sure that a successful carrer is either a broker or an investment banker.Make money whether the client loses/gains money:-) .Infact, I had been reading ‘Who says Elephant’s cant dance’ (IBM’s revival story) and the author has made some real valid points in this regard (I-Bankers) and long term shareholding.Will hopefully get to share those soon too!!

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