Best Practices to Comply with SEBI Cloud Service Adoption Framework
In response to the increasing incidents related to technical glitches in the financial sector, the Securities and Exchange Board of India (SEBI) has taken a proactive approach by forming a working group. This group has developed a comprehensive framework to address the challenges and risks associated with adopting cloud computing solutions. The framework aims to guide SEBI Regulated Entities (REs) in implementing robust risk management strategies for cloud adoption.
SEBI’s Cloud Computing Framework:
The primary objective of SEBI’s framework is to reduce the risks associated with cloud adoption by establishing essential access and data controls. By providing a principle-based approach, the framework outlines mandatory controls and baseline security measures for REs and Cloud Service Providers (CSPs). It addresses governance, risk management, compliance, and other crucial aspects to ensure a secure transition to cloud computing.
SEBI’s framework is designed to help REs manage the risks associated with cloud adoption. The framework comprises nine high-level principles:
- Governance, Risk, and Compliance Sub-Framework
- Cloud Service Provider Selection
- Data Ownership and Data Localization
- Regulated Entity Responsibility
- Regulated Entity Due Diligence
- Security Controls
- Contractual and Regulatory Obligations
- Business Continuity Planning, Disaster Recovery, and Cyber Resilience
- Vendor Lock-in and Concentration Risk Management
Understanding Cloud Computing:
Cloud computing is the delivery of on-demand computing services over the Internet, including storage, processing power, applications, and software. It allows users to access computing resources from anywhere with an internet connection, offering scalability, ease of deployment, and lower maintenance costs
Overview of SEBI Regulations for securing cloud data:
The SEBI regulation framework establishes specific requirements for regulated entities aimed at bolstering the security of cloud data. The primary provisions within this framework include:
- Mandatory Adoption of Hardware Security Modules (HSM) and Key Management Systems (KMS)
- In-Use Data Protection through Encryption
- Retention of Key Control in Cloud Services
Key Components of the Framework:
The framework emphasizes the importance of a robust risk management strategy for cloud adoption, guiding REs through assessing risks, implementing controls, monitoring compliance, and ensuring adherence to regulatory standards. The guidelines are applicable to various entities in the financial market, including stock exchanges, clearing corporations, depositories, stockbrokers, mutual funds, asset management companies, KYC registration agencies, and qualified registrars to an issue and share transfer agents.
Implementation Timeline:
REs that do not currently utilize any cloud services must adhere to the framework immediately. Those already using cloud services have a transition period of up to 12 months to ensure compliance. During this period, REs are expected to assess their technology risk, align with business needs, and implement necessary measures to meet SEBI’s guidelines.
CryptoBind Solutions in relation to SEBI guidelines:
JISA Softech delivers comprehensive solutions designed to empower organizations in effectively addressing the challenges posed by the Framework for the Adoption of Cloud Services. As businesses migrate their applications to new infrastructures, the need for a robust solution to safeguard data, both on-premises and in the cloud, becomes paramount.
Securing Cryptographic Keys:
CryptoBind HSM, a dedicated Hardware Security Module, provides organizations with a secure environment for key management and cryptographic operations. Through CryptoBind HSM, organizations maintain complete control over cryptographic keys, from generation to destruction. This ensures that sensitive keys remain inaccessible and uncontrolled by the CSP, providing organizations with a higher degree of control and ownership over their cryptographic assets.
Ensuring Data Security at Rest and in Motion
Our Encryption strategy employ column-level and application-level encryption to ensure the security of data at rest and in motion. By encrypting files while leaving their metadata unencrypted, we enable cloud service providers (CSPs) to perform essential system administration tasks without requiring privileged access to sensitive data. This approach strikes a delicate balance, allowing for seamless management while preserving the confidentiality of the protected information.
Comprehensive Cryptographic Key Management
CryptoBind KMS (Key Management System) is a centralized solution that facilitates automated key updates and distribution across various applications. With CryptoBind KMS, organizations can effectively manage the entire lifecycle of both symmetric and asymmetric keys. This system supports robust business processes, aiding in compliance with internal and external audits, thereby instilling confidence in key management practices.
Bring Your Own Key (BYOK)
JISA Softech introduces BYOK, giving customers the power of key ownership. With the ability to bring their own master keys, organizations can establish key management policies and enforce strict access controls. This level of control ensures that only authorized entities can access and decrypt data, reducing the risk of unauthorized access and potential data breaches.
Bring Your Own Encryption (BYOE)
In the BYOE framework, the Hardware Security Module (HSM) acts as an intermediary between the organization and the storage systems of the Cloud Provider. Additionally, the HSM manages all cryptographic processing tasks, providing an additional layer of security and control for organizations utilizing cloud storage systems.
Our offerings are designed to help organizations seamlessly integrate the security measures specified in the framework. These solutions empower organizations to bolster the security of their cloud data, safeguard sensitive information, and adhere to regulatory requirements effectively.
For additional details on SEBI compliance and optimal implementation of the necessary solutions, please don’t hesitate to get in touch with us. The team at JISA Softech is committed to delivering thorough solutions and assistance, ensuring your organization not only meets the requisite standards but also fortifies its data security in accordance with SEBI regulations. Contact us today for a consultation and expert guidance.
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Sales@jisasoftech.com
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