On May 16, 2025, IND NSD reminded participants that auditors must conduct on-site checks of service centers on sample basis to verify adherence to prescribed procedure.
Internal auditors are explicitly required to visit a specified number of service centers, excluding depository participant module (DPM) location, as part of the audit process.
Auditors must visit all service centers if there are 5 or fewer, and at least 5 if there are over 5; applies to internal audit reports from half year ending Sep. 2025 onwards.
On Apr. 11, IND NSD issued circular re internal and concurrent audit.
IND NSD reminded participants to have depository operations audited by qualified professionals, chartered accountants, company secretaries, or cost and management accountants with certificate of practice, and submit audit reports on half-yearly basis.
Follows IND NSD Apr. 2023 issued a policy on internal and concurrent audit, #168405.
Document dated Apr. 11, 2025, received from IND NSD Apr. 15, summarized Apr. 17.
Key Points
Revised audit report format in annexures 1 (with changes) and 2 (clean); audit should cover all depository operations, with scope expandable per guidelines in annexure 3.
Participants shall extend full co-operation to auditors to perform an effective audit.
Audit reports to be submitted by Nov. 15 (for Apr. to Sep.), May 15 (for Oct. to Mar.).
Concurrent audit areas must be completed by next working day or within a week for high volumes; include critical functions like account opening, delivery instruction slip issuance, power of attorney modification, grievances, KYC, pledges, data modification.
The same auditor can conduct both internal and concurrent audits; if so, consolidated report should be submitted; otherwise, two separate reports are required.
Revised audit report format applies to audit period from Oct. 1, 2024 to Mar. 31, 2025.
Reports not conforming to guidelines will be treated as non-submissions; NSD may request change of auditor if the report is unsatisfactory or not aligned with guidelines.
Auditors must visit adequate number of service centers for compliance and hold a valid NISM-series VI: DOCE certificate or complete a CPE program for risk-prone audits.
Participants must update auditor details (certificate number, validity, address, etc.) on e-pass portal, and are encouraged to periodically rotate their internal auditors.
May 2025 On-Site Checks
On May 16, 2025, IND NSD reminded participants that auditors must conduct on-site checks of service centers on sample basis to verify adherence to prescribed procedure.
Internal auditors are explicitly required to visit a specified number of service centers, excluding depository participant module (DPM) location, as part of the audit process.
Auditors must visit all service centers if there are 5 or fewer, and at least 5 if there are over 5; applies to internal audit reports from half year ending Sep. 2025 onwards.
