SEBI on Participation as Financial Information Providers in RBI’s Account Aggregator Framework

Capital markets regulator Securities and Exchange Board of India (SEBI) joins RBI’s account aggregator framework, a move that will give a boost to RBI regulated financial data sharing system.

On August 19, 2022, the Securities and Exchange Board of India (SEBI) issued Non-Banking Financial Company Account Aggregator Master Directions DNBR.PD.009/03.10.119/2016-17 dated September 02, 2016, for compliance by every Non-Banking Financial Company (NBFC-Account Aggregator) carrying out the business of AA.

An Account Aggregator (AA) is a Non-Banking Finance Company (NBFC) that is governed by the Reserve Bank of India (RBI) and that permits the retrieval or gathering of financial information about a customer from Financial Information Providers (“FIP”) with the client’s express authorization. The financial data exchanged via the Account Aggregator is not stored by the AA and is not to be considered part of its property.

This information must only be used to provide it to the customer or authorised financial information user. It cannot be used in any other way (FIU). On the basis of the client’s express agreement, Account Aggregator facilitates consolidation, organisation, and presentation of the financial information to the customer or FIU.

The Asset Management Companies (AMCs) through its Registrar and Transfer Agents (RTAs) and the Depositories are among the entities listed under Clause 3(xi) of the Master Directions as Financial Information Providers (FIPs) for the purpose of sharing information. The Depositories and AMCs are therefore referred to as FIPs in the securities markets moving forward (through their RTAs).

The “Financial Information,” as defined in Clause 3(ix) of the RBI Master Directions, will be provided by the FIPs in the securities market to customers and FIUs who provide the consent artefact (electronic consent as defined in the RBI Master Guidelines) through any of the Account Aggregators registered with RBI.

Further, FIPs in securities market shall enter into a contractual framework with the AAs, and the same shall distinctly specify the following:

a. Rights and obligations of each party

b. Modalities of Dispute Resolution mechanism

Only after receiving a valid consent document from the customer through the Account Aggregator are the FIPs in the securities markets permitted to exchange “Financial Information” relevant to securities markets through the AA. Clause 6 of the RBI Master Directions provides specifics about the consent architecture.

Further, the FIPs in the securities markets shall also verify, through appropriate means, the following in the consent artefact:

a. validity of consent.

b. specified dates and usage; and

c. the credentials of the AA.

The FIPs in the securities markets shall digitally sign the financial information and securely transmit the same to the AA in line with the terms stated in the consent artefact after due verification of the consent artefact.

The FIPs must respond to all requests in real time on the securities markets.

The technical requirements provided by ReBIT, as revised from time to time, are anticipated to be adopted by the FIPs in the securities markets, along with the necessary Information Technology (IT) infrastructure and interfaces to ensure secure data flows to AA. The technology must also be expandable to accommodate any other AA that the Reserve Bank of India may specify in the future.

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