Wireless Trading To Soon Debut On The Bourses
Securities trading in India is set to witness a sea change with the Securities and
Exchange Board of India (SEBI) giving a nod to registered brokers, currently providing internet-based trading, for providing securities trading using wireless technology.
Once implemented, the new form of transaction will give the investors the option to access a trading terminal from their broker to buy or sell shares or transfer funds from their bank accounts for trading purpose over their mobile phone. Right now, if an individual wants to trade he has to call up a broker or log on to a computer to buy or sell shares.
Over 25% of trading volumes on the Korean Stock Exchange come through hand held devies, which is now the world"s largest bourse in terms of volumes. In India, 15-20% of volumes on the National Stock Exchange (NSE) are generated through Internet trading. (Source: Media)
Path breaking change
The decision is being viewed by many as a path breaking step towards increasing the penetration of stock trading, which is currently concentrated in metropolitan areas and resides with a few top brokers. As per the SEBI Annual Report 2009-10, which was released on August 27, 2010, top five cities accounted for 86.5% of turnover at NSE during 2009-10 compared with 62.4% in 2008-09. While for BSE, the share of top five cities was at 86.6% against 24.2% in 2008-09.
It"s a no-brainer that once mobile trading kicks in, not only will the volumes increase, but this "skewed" growth in favour of metros as far as trading is concerned stands a chance to balance it out and further spread the equity culture.
As per the latest figures available from Cellular Operators" Association of India, there were over 470 million mobile connections in the country. In contrast to that there are only 10.6 million Demat account holders who invest in equities. The hypothesis is further supported by the fact that after saturated markets and cut-throat competition in metros, telcos are looking at expanding in rural and semi-urban areas.
Conclusion
It is only a matter of time now when the investors will be able to shop for shares on the mobile phones. Several brokerage houses are ready to launch mobile trading platform and are waiting for a go ahead from the stock exchange. SEBI has mandated stock exchanges to ensure that the broker complies with all the aspects of stock trading and making it a safe, secure and a fruitful exercise that serves the right purpose.
Hence, if one were to take a cue from the pace of mobile penetration and subscriber growth, it is possible that mobile trading will become more popular that internet trading, since the latter requires you to have a computer of your own and the former only a GPRS-enabled cell phone.
by: Anjali Shukla
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