Let me explain. Can multiple accounts login to the same device and transact - the answer is ‘Yes’. The issue is not with allowing multiple account logins, it’s with how these logins happen. You use a device, login to user 1’s account, log out, then login to user 2’s account. Perfectly fine. In my understanding, what’s not allowed is a “switch user” option that seamlessly logs into the user 2’s account without asking for password/doing any validation after the first time.
Exchanges have clearly said that all broker Internet based trading (IBT - web) and Securities trading through wireless technology (STWT - mobile etc) app logins happen after due 2 factor authentication (2FA) is successful. They even define the modes in which these two factor authentications can happen. Here’s the circular to reference. In this case, we don’t think this is being followed cos subsequent switch user is allowing logging into User 2’s account without the need for any input from User 2.
Further, all brokers undergo periodic system audits by exchange empaneled system auditors. Part of the audit requires the auditors to verify if broker apps have adequate session management mechanisms in place. Refer this circular. I’ve shared an extract from the circular for your reference; read point 6 (c) on session logouts.
We believe that providing a “switch user” facility without necessitating proper 2 factor authentications to login is in violation of exchange regulations and thus cannot offer such a facility. We feel it’s not in the interest of the markets since it’ll allow unscrupulous entities to offer “portfolio management” services and cheat gullible investors since it bypasses basic exchange prescribed requirements for login. As I’ve said earlier, we don’t restrict multiple users from logging into the same device, provided they login with password and two factor.
On a side note, there’s a consultation paper issued by SEBI where they’re proposing a possible “sim binding” exercise which if implemented, will render this feature useless since brokers cannot offer it (we believe they’re in violation even today while offering it). The link to the consultation paper is here