SEBI Moots Proposal To Improve Safeguards Within Account Aggregators Framework
Securities markets regulator SEBI has released a consultation paper that deals with use cases of Financial Information Users (FIU). The proposal intends to strengthen the safeguards within Account Aggregators (AA) framework and curb fraud and mis-selling.
Account Aggregators help a customer access and share his data digitally from one financial institution to another. AAs can’t see nor store the data while transmitting it since it is encrypted. For example, an investment advisor or a portfolio manager may seek such information regarding a client through the AA framework in order to design an investment plan.
The consultation paper notes that various safeguards are already in place however consumers sometimes follow unsafe practices such as disclosing user ID, password, OTP, account numbers, etc to third parties. Such mistakes make them vulnerable to fraud.
The public can submit comments till August 31, 2023, on queries about whether any type of intermediaries in the security market needs to be excluded from functioning as FIU. Views are also sought on the inclusion of any more categories of information under the ambit of the AA framework.
