We really need to understand this framework that the regulator has set for PMS fund managers. What exactly do they mean by having a stronger and much more resilient cyber framework?
Basically in March 2021, the regulator came out with a BCP plan circular, making sure that business continuity should be managed during different events, for example, if there is a terrorist attack or earthquake. Now cyber security is also becoming extremely important. If you just look at statistics around cyber security, some estimates suggest that there are like 10 to 20 attacks per second worldwide or the cost is in the hundreds of billions when it comes to let us say ransomware attacks. So there is a lot to do with data security and data privacy. So that is where the regulators are stepping in and making sure that large PMS providers who have more than 3000 crores do have a plan in place to prevent such attacks and if let us say they do become the victim of such an attack, they have a plan B and contingencies in place to address that and make sure that the system still continues to support the investors.
And that is really the core job of the regulators. So I think it is fantastic that the regulators are taking the step and making sure that they are making the entire system in India robust through this framework.
Do you think this will also come on the other AMCs, right now we are just talking about PMS, but then what about the rest of them?
Yes, I think it is only a matter of time. So, a lot of distributors and referral partners of AMCs and PMS providers, manufacturers, already have a due diligence process where they ask such questions of these providers.
So, it is going to be pressure from all sides. For example, at Sharekhan also, we only partner with people who meet certain criteria and those criteria include such commitments and such tight policies around the BCP as well as cybersecurity. So, it is just a matter of time before everyone has to step their game up and make sure that they are prepared for this because you cannot have an excuse let us say when it comes to investments that we were attacked and there is a ransomware, so suddenly you cannot access your money.
So, obviously those kind of issues no one wants to deal with or no one wants to have their clients exposed to that kind of risk.
