Internal Audit for stock brokers/clearing members


DEPUTY GENERAL MANAGER

MARKET INTERMEDIARIES REGULATION &

SUPERVISION DEPARTMENT

DIVISION OF POLICY AND SUPERVISION - III

Tel: 26449261, Fax: 26449021

Email: manojk@sebi.gov.in

MIRSD/ DPSIII/ Cir-26/ 08

August 22, 2008

The Managing Director / Executive Director

of all Stock Exchanges

Dear Sir,

Sub: Internal Audit for stock brokers/clearing members

In continuation with the Circular No.F.1/5/SE/83 dated May 31, 1984 of Government

of India, Ministry of Finance, Department of Economics Affairs, Stock Exchange

Division, you are advised to direct your stock brokers/clearing members to carry out

complete internal audit on a half yearly basis by independent qualified Chartered

Accountants.

The scope of such audit shall cover, interalia, the existence, scope and efficiency of

the internal control system, compliance with the provisions of the SEBI Act, 1992,

Securities Contracts (Regulation) Act 1956, SEBI (Stock Brokers and Sub-Brokers)

Regulations, 1992, circulars issued by SEBI, agreements, KYC requirements, Bye

Laws of the Exchanges, data security and insurance in respect of the operations of

stock brokers/clearing members. The first such audit period should be from October

1, 2008 to March 31, 2009.

The exchanges shall ensure compliance of the above mandatory requirements by

all the stock brokers/clearing members.

The Stock Exchanges are advised to:

1. make necessary amendments to the relevant bye-laws, rules and

regulations for the implementation of the above decision immediately,

2. bring the provisions of this circular to the notice of the member brokers

/clearing members of the Exchange and also to disseminate the same on

the website, and

3. communicate to SEBI, the status of the implementation of the provisions of

this circular in the Monthly Development Report.

This circular is being issued in exercise of the powers conferred by Section 11 (1) of

Securities and Exchange Board of India Act, 1992 to protect the interest of

investors in securities and to promote the development of, and to regulate, the

securities market.

Yours faithfully,

MANOJ KUMAR

 

CA. Amit Daga
on 28 August 2008
Published in Audit
Source : ,





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