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CS Professional · IFSCA - Regulations, Listing and Compliances · Capital Market Intermediaries

Aarav Wealth, an IFSCA-registered intermediary, plans to shift its client records to an outsourced cloud provider. Which approach is consistent with its general obligations?

The intermediary may outsource but remains fully responsible for regulatory compliance. It must safeguard client confidentiality, ensure IFSCA can access the records and supervise the vendor. Responsibility cannot be transferred to the service provider by contract.

  1. AOutsource fully and treat all responsibility as transferred to the vendor
  2. BOutsource without informing anyone since records are internal
  3. COutsource only if the vendor is located in India
  4. DOutsource if it wishes, but remain responsible for compliance, ensure confidentiality and access to records for IFSCA, and monitor the vendorCorrect

Explanation

Outsourcing does not shift accountability; the intermediary stays fully responsible for its obligations, client confidentiality and regulator access to records. Vendor location is not the test.

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