SEBI’s Cloud Services Adoption Framework: A One-Stop Solution for Meeting Regulatory Standards

As the financial sector embraces technological advancements, cloud computing has emerged as a game-changer in terms of scalability, cost-efficiency, and accessibility. However, with these benefits come significant risks, particularly concerning data security and regulatory compliance. To address these concerns, SEBI has recently announced guidelines, outlined in circular no. SEBI/HO/ITD/ITD_VAPT/P/CIR/2023/033 on March 6, 2023, regarding the adoption of cloud services by entities regulated by SEBI, referred to as Regulated Entities or REs. These guidelines establish a framework for REs to ensure robust data protection while adopting cloud services. In this article, we delve into the key risks, control measures, and best practices outlined in SEBI’s circular, dated March 6, 2023, for securing data in the cloud.

These guidelines establish a comprehensive framework for Regulated Entities (REs) to adhere to, encompassing essential standards for security and regulatory compliance when implementing cloud solutions.

According to the guidelines, REs is required to conduct a thorough assessment of the risks associated with cloud computing and implement necessary control measures before adopting cloud services. By following the recommendations outlined in the framework, REs can effectively manage risks through robust risk assessment strategies and the implementation of appropriate controls, thereby ensuring security and compliance with regulatory requirements.

The primary objective of this circular is to highlight the key risks and critical control measures that REs must consider and implement when embracing cloud computing technology.

SEBI Regulation requirements:

This framework mandates certain requirements for regulated entities to enhance the security of cloud data. The key provisions of the framework are as follows:

• Prepare a detailed incident plan.
• Implement encryption of data at rest.
• Identify and encrypt sensitive data or personally identifiable information (PII) during transit.
• Implement file-level encryption and tokenization for sensitive data.
• Utilize a dedicated Hardware Security Module (HSM).
• Implement a key management system.
• Ensure that backup data is encrypted alongside the primary data.
• Deploy data leakage prevention (DLP) measures.
• Implement log retention policies and enforce a password policy for all assets.
• Require two-factor/multifactor authentication for users accessing the data.

How can JISA Softech help?

JISA Softech offers a range of solutions that can greatly assist organizations in meeting the requirements and addressing the challenges presented by the Framework for the Adoption of Cloud Services.

• CryptoBind Hardware Security Module (HSM): JISA Softech provides a robust and dedicated Hardware Security Module solution. HSMs ensure the secure storage and management of cryptographic keys, offering a high level of protection against key compromise and unauthorized access. By implementing CryptoBind HSM, organizations can enhance the security of their encryption keys and strengthen their overall data protection.
• CryptoBind Key Management System (KMS): Effective key management is critical to maintaining the confidentiality and integrity of encrypted data. CryptoBind Key Management System provides a comprehensive solution for generating, storing, and distributing encryption keys securely. This solution ensures that encryption keys are managed efficiently and in compliance with industry standards, helping organizations meet the requirements of the framework.
• CryptoBind Encryption & Tokenization: CryptoBind Encryption and Tokenization solutions offer advanced techniques to safeguard sensitive data. These solutions enable organizations to encrypt data at rest and in transit, ensuring that it remains protected from unauthorized access. Additionally, tokenization replaces sensitive data with tokens, rendering it useless to unauthorized individuals. By implementing these solutions, organizations can enhance the security of their data and meet the encryption and tokenization requirements of the framework.
• CryptoBind Authentication Solution: To meet the requirements of two-factor or multi-factor authentication, JISA Softech offers a robust CryptoBind Authentication Solution. This solution provides secure and reliable authentication mechanisms, such as password-based authentication, biometrics, and security tokens. By implementing this solution, organizations can strengthen their user authentication processes and reduce the risk of unauthorized access to cloud data.

Our comprehensive solutions can assist organizations in effectively implementing the security measures outlined in the framework. These solutions enable organizations to enhance the security of their cloud data, protect sensitive information, and ensure compliance with the regulatory requirements.

For more information on SEBI compliance and how to implement required solutions effectively, please feel free to contact us. Our team at JISA Softech is dedicated to providing comprehensive solutions and support to ensure your organization meets the necessary requirements and enhances its data security in line with SEBI regulations. Reach out to us today for a consultation and expert guidance.

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