Sebi says no separate approval needed if existing platform used on mobile interface

The mobile phone — your soulmate, secret keeper, data sorter and status symbol — will now be your stock broker, too.

Brokers, big and small, are likely to begin offering trading facility on mobile phones as regulators seemed to have been convinced over the safety of transactions through this medium.

Reliance Money is first off the block. Sudip Bandhopadhyay, director and CEO, Reliance Money, which unveiled the company's mobile trading portal on Tuesday, said, "We went through a long regulatory process. We explained to them that we are just adapting our existing online platform to the mobile screen. All the same risk management, security systems etc will apply to this automatically and that we are not creating an independent platform for mobiles. They have told us that since this is not a new platform, no separate approval is required."

This is crucial as till recently, regulators were not comfortable with idea of allowing stock market transactions through mobile.

Though technology was available for more than a year, many online players such as Reliance Money, ICICIdirect.com and Indiainfoline had to be content with just providing stock market related information through mobiles. They were not able to offer trading on mobile for want of regulatory blessing.

Though there was no specific regulation barring brokers from offering the trading facility through mobile phones, Sebi was not comfortable as it was concerned about the safety of transactions in this new medium. However, the brokers seemed to have convinced them, now.

RBI, however, has not permitted financial transactions through mobile phone yet.

Bandhopadhyay said, "Since the payment happens through a bank gateway approved by the RBI and not through the mobile phone per se, there is no problem there."

Now with the precedent clearly set, more players are likely to follow suit. "Mobile trading is a concept that shall soon take the country by storm," said Rudi Pecker, country head, Religare Technova, which helped Reliance Money develop the trading platform for mobiles.

Pecker says the 'demonstration effect' will kick in soon. "Once this (Reliance platform) gets running, more players will get the confidence to get on the bandwagon," he said, adding that a number of his 140-strong broker clientele have shown interest. He declined to reveal names of the interested brokers.

"We had the software ready already. But we did not launch because we wanted the regulatory position to be clear. Now, with this development, it will be only matter of time before we launch our trading on mobile," said an official with a local brokerage on the condition of anonymity.

US-based Interactive Brokers (IBKR), which is launching its India operations early March, is planning to offer mobile trading from Day 1. Gerald Perez, managing director, IBR, said, "We offer this service to our customers in various markets across the world. But, you see them more in Asia, than probably in the United States. There is a huge culture here people want to do business on mobile phone. People do not want to miss an opportunity. We are happy to have that offer."

London-based Perez said mobile trading makes more sense in India than anywhere, because of the cheaper call rates. "It is cost-effective in India than in other parts of the World. If you look at UK, the text messages are very expensive — the companies are pretty much a monopoly. Here in Asia, it's not that expensive so it opens up lot of possibilities." 

N Sundaresha Subramanian/ DNA-Daily News & Analysis Source: 3D Syndication