Securities and Exchange Board of India (SEBI) has taken a bold step to give a big boost to equity trading by allowing mobile trading and Smart Order Routing (SOR) between stock exchanges. With the permission of mobile trading the stock market investors will have no need to call up a broker or log on to a computer to buy or sell shares. An internet-enabled mobile phone holder has to access a trading terminal from their broker to buy or sell shares or transfer money from their bank accounts for the purpose. This move launched by Security and Exchange Board of India (SEBI) for mobile trading will increase the volume of share trading because in India the number of mobile holder is very large. According to July 2010 statistics, over 470 million people hold mobile connections while demat account (a share trading account, that is called the demat account which is needed for share trading) holders number is only 10.6 million.
Smart Order Routing (SOR), permitted by SEBI, will mainly help to deepen the derivative segment and bring down the concentration of volumes on a particular exchange. This SOR will also decrease the arbitrage opportunity. The introduction of SOR is expected to create a level creating field between stock exchanges and widen the derivative markets.
SOR is used for algorithmic trading and allows brokers' trading engines to systematically choose the execution destination between different exchanges based on factors like price, trading costs, speed, likelihood of execution and settlement, size, nature or any other consideration.
