All trading members / clearing members are required to carry out complete internal audit on a half yearly basis by independent qualified Chartered Accountants or Company Secretaries or Cost and Management Accountants who are in practice and who do not have any conflict of interest in or relation with the member other than the internal audit assignment.
The current half yearly internal audit is required to be carried out for the period from April 1, 2018 to September 30, 2018.
The Internal Audit Report for HY ended September, 2018 is required to be submitted on or before November 30, 2018 only in electronic form through BEFS. No documents are to be submitted in physical form.
The format of Auditor Certificate for Internal Audit, revised format for Internal Audit Report, sampling plan, list of indicative process/guidelines & references of SEBI circulars/BSE notices is attached as Annexure I, Annexure II, Annexure III and Annexure IV respectively.
The quality of internal audit reports received from members shall be monitored and appropriate steps shall be taken if the reports do not meet minimum expected quality levels. In case where internal audit report submitted is incomplete and not as per the guidelines like sample size not given, only certificate submitted without report or management comments not given etc., same would be treated as non-submission of internal audit report. Stock brokers are strictly advised to submit the report in the format prescribed by the Exchange.
Auditors are requested to mandatorily adhere to the sample selection guidelines specified therein (Annexure-III) and mention the sample size selected along with details of the instances of non-compliance (if any) against each of the checklist points. All working papers and records with respect to the audit should be retained by the auditors for verification by the Exchange as and when required.
Stock brokers may please note that the submission of Internal Audit Report for the half year ended September 30, 2018 after November 30, 2018 shall be treated as non-compliance and charges would be levied for the said non-compliance as below:
For Active Trading Members (who are required to submit the internal audit report)
Due time for submission : 2 Months (i.e November 30, 2018)
1 For 1st month after due date (from December 1, 2018), Fine of Rs. 200/- per day
2 Charges of Rs. 500,/ per day from 2nd month after due date (i.e January 1, 2019 onwards) till date of submission or disablement
2 weeks’ notice shall be given to the Member after the 3rd month from the due date ( i.e from March 1, 2019), subsequent to which the Member shall be disabled in all segments of the Exchange.
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Please note, the existing indicative penalties/action in the cases where management accepts the adverse findings made in the internal audit report has been reviewed and revised in consultation with SEBI & other Stock Exchanges. The revised penalty structure w.r.t adverse observation in the Internal Audit Report is attached as Annexure-V.
Stock brokers may please note that the facility for electronic submission of the internal audit report/details is available in BEFS (BSE Electronic Filing System).
The provision to submit the Internal Audit Report in electronic form through BEFS (BSE Electronic Filing System) is now enabled at following link:
https://befs.bseindia.com -> Internal Audit Report
Stock brokers are requested to refer to the User Manual and Internet Setting document available in the BEFS (Internal Audit Report module) while submitting the report.
Stock brokers are hereby informed that they may update their email id in BEFS on which they wish to receive the acknowledgment mail regarding the submission of Internal Audit Report in the menu “BEFS Alerts”. The module also provides the facility to add / modify/ delete email ids.
In case of any clarification the Stock brokers may contact the following officials.
NAME
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INTERCOM NO.
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Ms Priya Pillai
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2272 8598
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Ms. Jyoti Thukral
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2272 8214
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Mr Tushar Shetty
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2272 8217
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Helpdesk (for Technical queries)
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61363100
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Hitasha Gurbani Priya Pillai
Asst. Gen. Manager Sr. Manager
Broker Supervision Broker Supervision