Review of Internet Based Trading (IBT) and Securities trading using Wireless Technology (STWT)
Summary
This SEBI circular mandates specific technical and security standards for Internet Based Trading (IBT) and Securities Trading using Wireless Technology (STWT). It requires stock exchanges to ensure brokers implement measures such as IP address capture, encryption, and two-factor authentication. The provisions must be implemented within nine months, with exchanges responsible for monitoring unauthorized access and reporting compliance.
Text
The broker shall ensure compliance with clauses a to g regarding system availability, encryption, safety features, alternate channels, and authentication.
The broker shall capture the IP (Internet Protocol) address (from where the orders are originating), for all IBT/ STWT orders.
The brokers system should have built-in high system availability to address any single point failure.
There should be secure end-to-end encryption for all data transmission between the client and the broker through a Secure Standardized Protocol. A procedure of mutual authentication between the client and the broker server should be implemented.
The broker system should have adequate safety features to ensure it is not susceptible to internal/ external attacks.
In case of failure of IBT/ STWT, the alternate channel of communication shall have adequate capabilities for client identification and authentication.
Two-factor authentication for login session may be implemented for all orders emanating using Internet Protocol. Public Key Infrastructure (PKI) based implementation using digital signatures, supported by one of the agencies certified by the government of India, is advisable. Further the two factors in the Two-factor authentication framework should not be same.
In case of no activity by the client, the system should provide for automatic trading session logout.
The back-up and restore systems implemented by the broker should be adequate to deliver sustained performance and high availability. The broker system should have on-site as well as remote site back-up capabilities.
The clauses 1(a) to 1(g) shall be implemented within 9 months from the date of this circular.
In continuation to the above, the exchanges shall put in place a system for monitoring of specific complaints with regard to unauthorized access using IBT.
make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of the above decision.
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Source: SecMarx — Review of Internet Based Trading (IBT) and Securities trading using Wireless Technology (STWT). Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.