regulatory compliance under the information technology act, 2000
DESCRIPTION
null Pune June - 2012 MeetTRANSCRIPT
REGULATORY COMPLIANCE UNDER
THE INFORMATION TECHNOLOGY ACT, 2000
ADV. SAGAR RAHURKAR
CASES
Nadeem Kashmiri and HSBC
Karan Bahree and Mphasis
My case - Hyundai
ISSUES
Liability of Company (Sec. 85)
Protection of data – Concern for outsourcing
industry
Privacy of data – Individual’s concern
SEC. 43A – COMPENSATION FOR FAILURE TO
PROTECT DATA
If body corporate, possessing, dealing or
handling any sensitive personal data or
information in a computer resource which it
owns, controls or operates, is negligent in
implementing and maintaining reasonable
security practices and procedures and
thereby causes wrongful loss or wrongful
gain to any person
Liability – Damages by the way of
compensation
ADJUDICATION
For claims upto Rs. 5 Crores –
Adjudicating officer
For claims above Rs. 5 Crores - Civil
courts (Unlimited liability)
WHO IS LIABLE?
Sec.85: Offences by companies
• The company itself, being a legal person;
• The top management including directors; and
• The managers (persons directly responsible for the data)
If it is proved that -
• they had knowledge of contravention; or
• they have not used due diligence
• that it was caused due to their negligence
ISSUES
What is Sensitive Personal data or
Information?
What are Reasonable Security
Practices and Procedures?
THE SOLUTION
The Information Technology (Reasonable
security practices and procedures and sensitive
personal data or information) Rules, 2011
Enforceable from 11th April, 11
To be read with Sec. 43A
SPDI
Password
Health
condition
Sexualorientati
on
Healthrecords
Bio-metric
s
Financial info
SENSITIVE PERSONAL DATA OR
INFORMATION
Rule 3 - IT (Reasonable security practices and procedures and sensitive personal data or information)
Rules, 2011
REASONABLE SECURITY PRACTICES
Implementing comprehensive documented
information security programme and information
security policies
Containing –
Managerial, technical, operational and physical
security control measures commensurate with the
information assets held by the person.
Rule 8 - IT (Reasonable security practices and procedures and sensitive personal data or
information) Rules, 2011
REASONABLE SECURITY PRACTICES
The International Standard IS/ISO/IEC 27001 on
“Information Technology – Security Techniques –
Information Security Management System – Requirements”
is one such standard OR
If following other than IS/ISO/IEC codes of best practices
for data protection, shall get it duly approved and notified
by the Central Government OR
An agreement between the parties regarding protection of
“Sensitive Personal Information”
AUDITING
Necessary to get the codes or procedure certified or
audited on regular basis
Needs to be done by the Government Certified Auditor
Will be known as “Govt. Certified IT Auditor”
Not appointed yet
CERT-IN has empanelled IT Auditors
POLICIES/CLAUSES
COLLECTION OF INFORMATION
About obtaining consent of the information provider
Consent in writing through letter/fax/email from the provider
of the SPDI regarding purpose of usage before collection of
such information
Need to specify –
Fact that SPDI is being collected
What type of SPDI is collected?
How long SPDI will be held?
Rule 5 - IT (Reasonable security practices and procedures and sensitive personal data or
information) Rules, 2011
COLLECTION OF INFORMATION
Provider should know –
Purpose of collection
Intended recipients
Details of the agency collecting the information and agency
retaining the information
Body Corporate not to retain information longer than required
Option should be given to withdraw the information provided
SPDI shall be used only for the purpose for which it has been
collected
Shall appoint “Grievance Officer” to address any discrepancies
and grievances about information in a timely manner – Max. time
– One month
PRIVACY AND DISCLOSURE OF
INFORMATION POLICY
Policy about handling of SPDI
Shall be published on website or should be available to view/inspect @
any time
Shall provide for –
Type of SPDI collected
Purpose of collection and usage
Clear and easily accessible statements of IT Sec. practices and policies
Statement that the reasonable security practices and procedures as provided
under rule 8 have been complied
Rule 4 - IT (Reasonable security practices and procedures and sensitive personal data or information)
Rules, 2011
DISCLOSURE
Disclosure –
Prior permission of provider necessary before disclosure
to third party OR
Disclosure clause needs to be specified in the original
contract OR
Must be necessary by law
Third party receiving SPDI shall not disclose it
further
Rule 6 - IT (Reasonable security practices and procedures and sensitive personal data or information)
Rules, 2011
TRANSFER OF INFORMATION
Transfer to be made only if it is necessary for
performance of lawful contract
Disclosure clause should be a part of Privacy and
Disclosure Policy
Transferee to ensure same level of data
protection is adhered while and after transfer
Details of transferee should be given to provider
Rule 7 - IT (Reasonable security practices and procedures and sensitive personal data or information)
Rules, 2011
SEC 72(A) (CRIMINAL OFFENCE)
Punishment for Disclosure of information in
breach of lawful contract -
Knowingly or intentionally disclosing “Personal
Information" in breach of lawful contract
IMP – Follow contract
Punishment - Imprisonment upto 3 years or fine
up to 5 lakh or with both (Cognizable but Bailable)
GRAMM–LEACH–BLILEY ACT (GLBA,
USA)
Focuses on finance
Safeguards Rule - Disclosure of Nonpublic Personal
Information
It requires financial institutions to develop a written information
security plan that describes how the company is prepared for, and
plans to continue to protect clients’ nonpublic personal
information.
This plan must include –
Denoting at least one employee to manage the safeguards,
Constructing a thorough risk analysis on each department handling
the nonpublic information,
Develop, monitor, and test a program to secure the information, and
Change the safeguards as needed with the changes in how
information is collected, stored, and used.
THE FEDERAL INFORMATION SECURITY
MANAGEMENT ACT OF 2002 (FISMA, USA)
Focus on economic and national security interests of
the United States
Emphasized on “risk-based policy for cost-effective
security”
Responsibility attached to federal agencies, NIST and
the Office of Management and Budget (OMB) to
strengthen information system security
Not mandatory
No penalty for non-compliance
DATA PROTECTION DIRECTIVE (EU)
European Union directive regulating the processing of
personal data within the EU
Protection of individual’s personal data and its free
movement
Coming soon - European Data Protection Regulation
Not mandatory
No penalty for non-compliance
PREAMBLE OF THE IT ACT
Purpose behind enacting IT Act –
To provide legal recognition to e-commerce
To facilitate e-governance
To provide remedy to cyber crimes
To provide legal recognition to digital evidence
o Preamble doesn’t specify that the Act aims @
establishing IT Security framework in India
BENEFITS
Compliance with legislation
No liability on organisation
Increased reliability and security of systems
Systems rationalization
Improved management controls
Improved risk management and contingency
planning
