SEBI Consultation Paper on FIU use cases

A technological framework’s security reflects human behavior. Despite safeguards and communication urging caution, consumers often share sensitive information with third parties, leading to fraud, misappropriation, and unsolicited marketing. Echoing Sahamati’s push for the Fair-Usage-of-AA, the Securities and Exchange Board of India (SEBI) has released a consultation paper seeking comments to improve the safeguards within the AA framework, especially to curb misuse of the financial information in frauds, misappropriation, mis-selling, or unsolicited cross-sell/upsell, etc. The questions floated in the consultation paper are as follows

• Do any class or type of intermediaries in the Indian Securities market require being excluded from functioning as FIUs? If so, please provide the rationale.
• What are the potential use cases for the AA framework for SEBI-regulated entities?
• Are there any additional categories of financial information which may be included under the ambit of the  AA  framework?  If so,  please provide the use  case/s  and rationale.
• Are there safeguards required in the AA Framework to protect customers’ interests regarding additional data security or to curb potential misuse of the financial information in frauds, misappropriation, mis-selling, or unsolicited cross-sell/upsell, etc.?
• Are there safeguards or measures required in the AA Framework to address the concerns of customers,  financial information providers, account aggregators, or financial information users? If so, please provide the rationale.

In line with the ecosystem’s commitment to participatory governance, Sahamati urges all the AA network participants, especially those registered with and regulated by SEBI, to share their feedback on this consultation paper with the regulator. Last month, Sahamati began a similar exercise as part of market feedback to collate and anchor the industry’s opinion on AA use cases for SEBI-licensed entities. The SEBI paper has bolstered our commitment to this endeavor. This consultation paper is a definite step by the regulator towards further strengthening data governance in the AA ecosystem, as it is now poised to scale and deliver its far-reaching impact for consumers and enterprises.

Check out the SEBI consultation paper here: Consultation Paper on collating and defining use cases of Financial Information Users in the Account Aggregator Framework in Securities Markets