BackSebi joins Account Aggregator system; Here's how it will help investors
The move will allow customers to share information about their mutual fund and stock holdings with financial service providers.
PremiumIn big news for stock market investors, the Securities Exchange Board of India (SEBI) said in a circular that it joined the Reserve Bank of India’s (RBI’s) Account Aggregator framework on Friday. The move will allow customers to share information about their mutual fund and stock holdings with financial service providers.
Under the framework, Financial Information Providers (FIPs) in the securities market, like depositories and asset management companies (AMCs) -- through their Registrar and Transfer Agents or RTAs -- will provide financial information pertaining to securities markets to the customers and consented Financial Information Users (FIUs) through any of the account aggregators registered with the RBI.
With this move, the entire trading system, depository system, as well as mutual fund system will soon be online in the Account Aggregator system.
What is Account Aggregator (AA) system?
Last year, the central government unveiled the Account Aggregator network, a financial data-sharing system that could revolutionize investing and credit, giving millions of consumers greater access and control over their financial records and expanding the potential pool of customers for lenders and fintech companies. The AA system empowers individuals with control over their personal financial data.
What is an Account Aggregator?
An Account Aggregator (AA) is a type of RBI regulated entity (with an NBFC-AA license) that helps an individual securely and digitally access and share information from one financial institution they have an account with to any other regulated financial institution in the AA network.
Data cannot be shared without the consent of the individual.
There will be many Account Aggregators an individual can choose between.
Account Aggregator replaces the long terms and conditions form of ‘blank cheque’ acceptance with granular, step-by-step permission and control for each use of your data.
How will the new Account Aggregator network improve an average person's financial life?
India's financial system involves many hassles for consumers today -- sharing physical signed and scanned copies of bank statements, running around to notarise or stamp documents, or having to share your personal username and password to give your financial history to a third party. The Account Aggregator network would replace all these with a simple, mobile-based, simple, and safe digital data access & sharing process.
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