New SEBI's Cybersecurity and Cyber Resilience Framework: Key Data Protection Strategies for Regulated Entities

Why the CSCRF Matters

SEBI’s CSCRF is designed to ensure that all REs, from stock exchanges to portfolio managers, adopt comprehensive cybersecurity measures that can withstand, contain, and recover from cyberattacks. At its core, the framework emphasizes data protection as a critical component of cyber resilience.

With increasing digitization and the advent of sophisticated threats, protecting data—especially sensitive and personal data—is no longer optional. The framework mandates that entities not only anticipate threats but also ensure continuous improvement in their cybersecurity defenses.

Key Data Protection Requirements Under CSCRF

1. Encryption and Data Security:

The CSCRF places a strong emphasis on encryption as a vital tool to protect sensitive information. Full-disk encryption (FDE) and file-based encryption (FE) must be used to secure data both at rest and in transit. By layering encryption techniques, REs can ensure that even if an unauthorized entity gains access to their data, it remains unreadable without the decryption keys.

For Skyflow, we take this a step further by offering field-level encryption for sensitive data, allowing businesses to protect critical pieces of information like personally identifiable information (PII) while still enabling secure operations across teams and geographies.

2. Data Localization and Residency:

India’s data localization rules require that a copy of sensitive data be stored within the country’s borders. The CSCRF echoes this mandate, stipulating that all REs must ensure their data—especially regulatory and sensitive data—resides within India. This is where businesses often face challenges, particularly when leveraging cloud services that operate across multiple regions.

At Skyflow, we enable compliance with these rules through data residency solutions that ensure your data is securely stored and managed in localized environments, while still taking advantage of the flexibility and scalability of cloud services.

3. API and Endpoint Security:

APIs are the backbone of modern applications, but they are also a common vector for cyberattacks. The CSCRF mandates that REs implement API security with proper authentication, rate limiting, and protection against threats. Similarly, endpoint security is critical to ensure that devices accessing sensitive data are protected from vulnerabilities.

With Skyflow, we focus on secure API architectures, ensuring that every API call is authorized, authenticated, and monitored to prevent any unauthorized access or data leaks. Our solutions also integrate seamlessly with existing endpoint security tools, offering a layered approach to data protection.

4. Third-Party Accountability:

Many businesses today rely on third-party vendors for various services, from IT infrastructure to cloud hosting. The CSCRF places the onus on REs to ensure that third-party service providers adhere to the same data protection standards, making businesses accountable for any violations.

Skyflow provides data vaults that allow companies to easily tokenize or anonymize sensitive data before sharing it with third-party providers, ensuring that even if a breach occurs outside the organization, sensitive data remains protected.

5. Regular Audits and Vulnerability Testing:

One of the most important requirements of the CSCRF is the mandate for regular vulnerability assessments and penetration testing (VAPT) to ensure that cybersecurity controls are up to date. This is crucial for identifying and mitigating risks before they turn into serious incidents.

By integrating continuous monitoring and automated compliance reporting within our privacy infrastructure, Skyflow helps businesses not only meet these requirements but also gain insights into potential vulnerabilities in real time.

How Skyflow Can Help Indian REs Navigate the CSCRF

Skyflow’s PII Data Vault and compliance solutions are designed to help REs meet the stringent data protection standards laid out in the CSCRF, while also enabling operational efficiency. Here’s how we align with SEBI’s cybersecurity framework:

• Data Localization: Our solutions ensure data residency in India, in compliance with both SEBI regulations and broader data protection laws.
• Encryption: With advanced field-level encryption, we go beyond the standard requirements to ensure that sensitive data is always protected.
• Compliance Monitoring: Our privacy infrastructure includes built-in compliance tools that simplify the process of meeting SEBI’s reporting requirements.
• Incident Management: We offer robust security operations support that helps businesses quickly detect, respond to, and recover from cybersecurity incidents.

As the cybersecurity landscape evolves, staying compliant with frameworks like SEBI’s CSCRF is not just about avoiding penalties—it's about building trust with customers and stakeholders. Businesses that prioritize data protection are better positioned to thrive in the digital age.

Conclusion

The CSCRF is a critical step forward for data security in India’s financial sector, and the framework’s focus on encryption, data localization, and regular audits offers a clear roadmap for REs to follow. At Skyflow, we’re committed to helping businesses meet these standards while safeguarding the sensitive data that powers their operations.

As we move into 2025 and beyond, cybersecurity and data protection will only grow in importance. The time to act is now—let's work together to build a more secure, resilient future for the Indian securities market.

Feel free to connect with me to discuss how Skyflow can help you navigate the new SEBI regulations and enhance your data protection strategy.