Sebi urges intermediaries to join accounts aggregator framework

The Securities and Exchange Board of India (Sebi) has directed stock market intermediaries such as asset management companies (AMCs) and depositories to join the account aggregator framework introduced by the Reserve Bank of India (RBI).

The market regulator also set rules that will specifically be applicable to players in the stock market ecosystem joining the aggregator framework.

The account aggregator is an RBI-regulated non-banking financial company (NBFC). It facilitates retrieval or collection of financial information pertaining to a customer from financial information providers (FIP). It is on the basis of explicit consent of the customer.

“The FIPs in the securities market will provide the financial information through any of the account aggregators registered with the RBI. Further, FIPs in the securities market will enter into a contractual framework with the account aggregator,” Sebi said in a circular on Friday.

FIPs are entities that possess the financial information of a customer.

These are banks, AMCs, pension funds or depositories.

They represent the “source” of personal or business data that financial information users (FIUs) can access via requests through an aggregator.

FIUs are entities that use this data to offer financial products and services to their customers.

Sebi has said that FIPs in the securities market will be allowed to provide “financial information” to customers, who furnish their consent through any of the account aggregators registered with the RBI.

Further, FIPs in the securities market — while entering into a contractual framework with the aggregators — will have to specify the rights and obligations of each party and also the modalities of a dispute resolution mechanism.

Launched in September 2021, account aggregators are licensed NBFCs that enable instant exchange of financial data between FIP and FIUs. They are responsible for providing services that include the transfer — but not storing — of a customer’s data.

The Sebi circular emphasises on data protection.

“There will be adequate safeguards built in the IT systems of FIPs in the securities markets. This will ensure that it is protected against unauthorised access, alteration, destruction, disclosure or dissemination of records and data,” the circular said.

Recently, all the 12 public sector banks joined the aggregator ecosystem, bringing into its fold over a billion accounts. This follows the Union finance minister’s nudge. Major private banks are live on the ecosystem.

So far, over a million accounts have been linked to the ecosystem and 998,262 consents have been given during the same period.

The account aggregator framework will see the GST Network go live in a few months. And, work has begun to include insurers and pension funds in the ecosystem.