Comprehending SEBI Cloud Security Regulations: A Handbook for Regulated Organizations
In a move to bolster the security of the financial ecosystem, the Securities and Exchange Board of India (SEBI) has introduced the Framework for Adoption of Cloud Services by Regulated Entities (REs). The new framework sets clear expectations for how REs must secure cloud workloads, applications, and data.
The framework addresses concerns about data confidentiality, operational resilience, supply chain security, and more. It outlines specific focus areas for security, including management interfaces, internet-facing interfaces, and inter-organization interfaces.
REs, which typically include stock exchanges, mutual funds, brokers, sub-brokers, portfolio managers, investment advisors, and other intermediaries involved in the securities market, are required to have a robust, isolated, and encrypted backup and recovery plan. Backups should be tested regularly to ensure that ransomware, accidental deletions, or cloud outages do not disrupt critical business operations.
To help REs meet these requirements, Qualys, a leading provider of cloud-based security and compliance solutions, offers a range of tools. Qualys TotalCloud Continuous Security Posture Management (CSPM) continuously discovers and monitors cloud assets for misconfigurations, while KSPM uses Cluster Sensors with CIS Benchmarks to secure Kubernetes environments, enforce policies, and ensure continuous compliance across hybrid and managed setups.
Qualys Enterprise TruRisk Platform unifies security controls into a single, integrated platform, helping REs meet SEBI's cloud security controls. The platform provides real-time detection, alerts, and workflow automation by integrating Qualys' datasets with popular SIEM and SOC solutions.
For vulnerability management, Qualys Vulnerability Management, Detection, and Response (VMDR) continuously scans, detects, prioritizes, and facilitates remediation of vulnerabilities. Qualys Web Application Scanning (WAS) conducts automated, scalable scans for vulnerabilities.
To secure endpoints and networks connecting to cloud services, SEBI recommends implementing antivirus tools, Data Loss Prevention (DLP), micro-segmentation of networks, and monitoring tools like cloud access security broker (CASB) or secure access service edge (SASE) solutions. Qualys Cloud Agent and Patch Management provide a lightweight agent that delivers asset inventory, vulnerability scanning, and patching across Windows, Linux, and Mac endpoints, regardless of location.
CSPs handling platform-level encryption must manage the full lifecycle of cryptographic keys securely. REs should ensure that encryption practices meet SEBI's data confidentiality, privacy, and integrity standards. Qualys supports CSP-native Key Management Services (KMS) integrations and enforces encryption policies across cloud resources via security controls in TotalCloud.
Access to CSP-managed resources must follow strict controls based on the principle of least privilege. Qualys TotalCloud includes Cloud Infrastructure Entitlement Management (CIEM) capabilities that provide deep visibility into identities, roles, and permissions across multi-cloud environments.
SEBI emphasizes the importance of a well-defined incident response plan that is tightly integrated with the Security Operations Center (SOC). Engaging Managed Service Providers (MSPs) or System Integrators (SIs) adds complexity. SEBI says CSPs must have clear, enforceable agreements with their partners or subcontractors to ensure that security controls are consistently applied across the supply chain.
Compliance with SEBI's guidelines is critical for REs to maintain the trust and integrity of the financial ecosystem. Non-compliance can lead to severe financial, legal, and reputational consequences for REs. Qualys TotalCloudTM helps with unified asset visibility, misconfiguration and identity risk detection, vulnerability and patch management, policy compliance, and exportable audit evidence.
As of now, 80% of corporate banks in India have migrated their operations to the cloud. With the increasing reliance on cloud services, the need for robust and secure cloud infrastructure is more important than ever. The new SEBI framework is a significant step towards ensuring the security and resilience of the financial sector in India.
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