Internet stock trading kicks off

Internet stock trading kicks off
R L PAI

MUMBAI, FEB 1: Indian stock markets have finally caught up with the world wide web. Stock trading via internet became reality when Securities and Exchange Board of India chairman D R Mehta punched the first web order at 3.00 pm in Mumbai on Tuesday. A P Kurian, chairman of Association of Mutual Funds of India (AMFI) bought 100 shares of Reliance Industries at the rate of Rs 334 per share from an unidentified seller.

Geojit Securities Ltd, a joint venture with Kerala State Industrial Development Corporation (KSIDC) and one of the leading retail share broking firms, became the first broking firm to launch internet trading in the country, barely a week after it was allowed by the regulator SEBI. The deal was routed through the firm's website www.geojitsecurities.com.

Opening the fabulous world of internet to investors, Mehta said internet trading would increase liquidity and trading volumes and help reduce transaction costs tremendously. ``Internet trading will mean widening of the markets. The reach willbe so extensive that even the remotest village will be connected,'' Mehta said.

Geojit's Internet trading module is based on software developed by the National Stock Exchange's information technology company NSE.IT. Mehta said while an increase in volumes did pose concerns about the safety of the market, SEBI's Internet trading norms had adequate safety clauses. ``Maybe the proposed cyberlaws will help strengthen this better,'' he said. SEBI had intimated to stock exchanges on Monday its norms for granting permission to brokers to start Internet trading. According to these, brokers must have a minimum net worth of Rs 50 lakh to provide this facility on their own. Stock exchanges will have to ensure that the broker's system has a provision for security, reliability and confidentiality of data through use of encryption technology.

Exchanges will also have to ensure that brokers know their clients well and prepare a model agreement for them to enter into with clients spelling out all their obligations andrights, he added.