PFRDA Frames Guidelines For Cloud Services Adoption By Intermediaries

Pension regulator PFRDA has come up with a policy for adoption of cloud services by intermediaries on the services being rendered by them. 

This would help ensure that the risks are addressed effectively and there is regulatory compliance by the registered intermediaries who have adopted these cloud services.

The policy has come at a time when the adoption of cloud services for delivering the IT services is on the rise and is also being encouraged by the government through various programmes.

The policy has laid down compliances by the intermediaries and the regulatory legal requirements, if they adopt the cloud services.

This move by PFRDA is intended to ensure that the adoption of cloud services by intermediaries neither diminish their ability to fulfill obligations to subscribers nor it impedes effective supervision of the Authority with the assessment of the attendant’s outstanding risks.

National Pension System (NPS) and Atal Pension Yojana (APY), Assets under management (AUM) have been growing at a significant pace of 25 per cent year-on-year(YoY) and now stands at Rs 10.23 lakh crore as of 28 October this year.

The new policy on the adoption of Cloud services would be in addition to the existing outsourcing guidelines. Pension Fund Regulatory and Development Authority (PFRDA) said in a circular that cloud services adoption would be considered as a part of outsourcing of the activities by registered intermediaries.

PFRDA had also issued guidelines earlier on outsourcing of activities for Central Record keeping Agencies and Pension funds. Those were simply meant for policy aimed at day-to-day handling of the operations and did not cover the outsourcing activities pertaining to IT and ITeS per say.

Further, the registration guidelines issued by PFRDA for intermediaries like CRAs and PFs etc. has provided a set of norms for adoption of emerging technologies like cloud computing.

PFRDA has also now estimated that intermediaries while adopting cloud services or other IT enabled services should have to take steps to ensure that the service providers employ the equally high standard of care in performing the services since they would have been employed by the intermediaries if the same activity was not outsourced.