Why in News?

• The Securities and Exchange Board of India (SEBI) unveiled a framework for the adoption of cloud services by stock exchanges, clearing corporations and other regulated entities (REs).

What in Today’s Article?

• What is the Background behind the Unveiling of the Framework?
• What is the Framework for Adopting Cloud Services?

What is the Background behind the Unveiling of the Framework?

• Cloud computing refers to the on-demand delivery of computing services (storing, managing and processing data, running applications and other software) over the internet or a network of remote servers.
• Instead of buying and maintaining computer products and services, one can pay to use a cloud computing service saving the time, effort and cost of doing it.
• It is becoming increasingly popular for delivering IT services, thanks to its scalability, ease of deployment, and lower maintenance costs.
• However, it also introduces new cyber security risks and challenges that businesses need to be aware of.

What is the Framework for Adopting Cloud Services?

• A crucial addition to SEBI’s existing guidelines on cloud computing, the framework will cover -
  • Governance, Risk and Compliance (GRC),
  • Selection of Cloud Service Providers (CSPs),
  • Data ownership and data localisation,
  • Due-diligence by REs,
  • Security controls,
  • Legal and regulatory obligations, etc.
• 
• The main objective of the framework is -
  • To identify and address the critical risks associated with cloud computing and
  • To establish mandatory control measures that REs must implement before adopting cloud services.
• The framework will come into force immediately for all new or proposed cloud onboarding assignments or projects of the REs.
• For REs that are currently availing cloud services should ensure that wherever applicable, all such arrangements are revised and they should be in compliance with the framework within 12 months.