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About Inspection Manual
As per Securities and Exchange Board of India (SEBI) Circular No. SEBI/SMD/DBA-1/CIR-27/2003 dated June 25, 2003, every stock exchange is required to inspect every year the books of accounts and other documents of at least 20% of its active Members including subsidiaries formed by the Regional Stock Exchanges.
The purpose of the inspection is to ensure that: -
Proper books of accounts, records and documents have been maintained by the Members in the manner specified in Rule 15 of the Securities Contracts (Regulation) Rules, 1957 and Regulation 17 (1) of the Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) Regulation, 1992. -
The Member has complied with the Rules, Byelaws and Regulations of BSE and with the provisions of the Securities Contracts (Regulation) Act, 1956, the Securities Contracts (Regulation) Rules, 1957, the SEBI Act, 1992 and the Rules and Regulations made there under and SEBI (Stock-Brokers and Sub-Brokers) Rules, 1992. -
The Members have complied with various notices, circulars, press releases, etc issued by the Ministry of Finance, SEBI and BSE. -
The conduct of the Members is in the overall interest of the capital market and the Members are fair in dealing with their clients. BSE has set up a department called Department of Surveillance & Supervision (DOSS), which has been entrusted with the responsibility to carry out inspection of the books of accounts, records and other documents maintained by its Members including their branches.
BSE issues letters to the Members selected on the basis of a defined criteria informing about the scheduled date of inspection and advising them to send the Inspection Questionnaire in soft as well as hard copy form (containing basic information about background and operations of the Member) filled up along with all the required data and documents before the commencement of inspection.
The Inspecting Team of BSE inspects the books and records on a sample basis and prepares the inspection report covering the irregularities, if any, observed during the course of inspection. Observations/findings of the inspection report are forwarded to the concerned Members. The Members are required to submit their reply on the observations contained in the Inspection Report, within the stipulated time.
The reply given by the Members is then vetted and action against the Members for non-compliances observed during the inspection, is initiated as per the norms laid down in this regard by the Defaulters' & Disciplinary Action Committee constituted by BSE.
The final action is communicated to the Members and the Members are also advised to take necessary steps to ensure that such non-compliances do not recur in future.
Moreover, to ensure compliance by the Members with the recommendations made by BSE, the Members are required to submit a compliance certificate either from their Compliance Officer or from a Chartered Accountant, within 30 days from the receipt of the final action letter from BSE confirming that all the recommendations made by BSE have been implemented by them.
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Inspection Manual
The Exchange has been conducting inspection of the trading members on a regular basis. In order to facilitate better planning and understanding during the inspection of books and accounts, provided below is the Inspection Manual that will help members prepare on various statutory compliance requirements for the Inspection.
Click here to download Inspection Manual
In case of any query/suggestion, Plz. contact Mr.Yogesh Bambardekar on 22728286 or write to us at yogesh.bambardekar@bseindia.com
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