Asset management firms (AMCs) and depositories are examples of stock market intermediaries that have been instructed by the Securities and Exchange Board of India (Sebi) to join the account aggregator framework put forward by the Reserve Bank of India (RBI). Additionally, the market regulator, Sebi established regulations that will only apply to participants in the stock market ecosystem who join the aggregator framework.
Sebi joins Account Aggregator framework: Key Points
- The account aggregator framework is a non-banking financial institution (NBFC) governed by the RBI .
- Account aggregator framework makes it easier to obtain or gather financial data about a customer from financial information suppliers (FIP).
- Account aggregator framework is based on the customer’s express consent.
- Financial information would be made available by the FIPs in the securities market through any account aggregators registered with the RBI with the help of account aggregator framework.
- Additionally, the account aggregator and FIPs in the securities market will enter into a contractual framework making an account aggregator framework.
- FIPs are organisations that have a customer’s financial information.
- These include depositories, banks, AMCs, and pension funds.
- By making requests through an aggregator, financial information users (FIUs) can access them as the “source” of personal or commercial data.
- FIUs are organisations that use this information to provide their clients with financial products and services.
Sebi joins Account Aggregator framework: Financial Data
- According to Sebi, if clients give their agreement through one of the account aggregators registered with the RBI, FIPs in the securities market are permitted to provide “financial information” to those customers.
- Additionally, FIPs in the Sebi market will need to outline each party’s rights and obligations as well as the specifics of a dispute resolution procedure when entering into a contractual framework with the aggregators (account aggregator framework).
- Account aggregators, which were introduced in September 2021, are approved NBFCs that allow for the immediate sharing of financial data between FIP and FIUs. They are in charge of rendering services that entail the transfer of client data but not its storage.
- Data protection is emphasised in the Sebi circular.
- Over a billion accounts have recently joined the account aggregator framework after all 12 public sector banks joined. This follows the shove from the Union’s finance minister. On the ecosystem, there are active major private banks.
- Over a million accounts have already been linked to the account aggregator framework, and during the same time span, 998,262 consents have been granted.
- In a few months, the GST Network will launch on the account aggregator framework. In addition, efforts to integrate insurers and pension funds into the ecosystem have started.