Markets regulator Securities and Exchange Board of India (Sebi) has proposed a new set of guidelines wherein biometric authentication will be required for stock trading through mobile applications.
The development comes against the backdrop of instances of cyber attacks on systems in different parts of the world including India.
The markets watchdog has sought comments from the market participants like brokers, traders and stock exchanges in this regard, and a final regulation will be put in place after taking into account views of all the stakeholders, regulatory sources said.
In case of applications installed on smartphones and tablets, traders and retail investors may need biometric authentication to buy and sell stocks, according to Sebi's proposal.
Further, it has been proposed that after few failed log-in bids, investors' account might be locked till fresh authentication is completed. For fresh authentication, an e-mail or one-time password may be sent to investors.
According to market experts, small brokers, who operate on low margins, may face difficulties in implementing the proposed guidelines.
Sebi is of the view that sophisticated cyber security and cyber resilience measures are required for the capital market.
The markets watchdog has been taking several steps to safeguard markets from cyber attacks. This included forming a high-level panel on cybersecurity in May last year to suggest measures to ring-fence capital markets from such attacks.
Also, Sebi is beefing up its IT team with experts from the cybersecurity arena to ensure stronger firewalls against such attacks and faster corrective measures.