Two-Factor Authentication for Demat Account: Market regulator SEBI has given a big relief to the demat account holders. By issuing a circular, it has been informed that two-factor authentication is not being implemented on the demat account at present. Right now SEBI will implement it from 1st April 2023 after making new rules on this matter.
It is worth noting that on June 14, 2022, the National Stock Exchange (NSE) had issued a notification for crores of demat account holders. In this notification, it was said that all demat account holders will have to enable two-factor authentication of their account by 30 September 2022. In the event of not doing so, account holders will not be able to login to their account, but now SEBI has extended its time limit.
What is Demat Account?
If you want to invest in the stock exchange, then you must have a demat account. Without this you cannot buy shares. Along with this, if you want to invest money digitally in mutual funds, bonds etc. investment options, then you will need a demat account.
What is Two-Factor Authentication?
In June, the National Stock Exchange had issued a circular regarding two-factor authentication in the demat account. Now its members have to use biometric authentication as an authentication factor to login to their demat account. On the other hand, authentication can be a knowledge factor.
Why is two-factor authentication necessary?
Biometric authentication uses fingerprint scanning, facial recognition or voice recognition. The knowledge factor can include password, PIN or any possession factor. Its information is available only to the user. Clients will get OTP through both SMS and E-mail.
Let us tell you that in the last few days there has been a rapid increase in the cases of cyber crime. In such a situation, NSE is trying to implement two-factor authentication to keep its demat account holders safe from cyber crime. With this, no cyber criminal will be able to login to your account because it has double security. Many demat account holders are currently using this two-factor authentication.