On Aug. 13, 2025, IND BSE provided the framework for empanelment of auditors, who are desirous of taking up assignments relating to system audit of trading members.
The auditor, audit firm, or company who meets the eligibility criteria prescribed by SEBI/BSE from time to time, shall submit a one-time online application for empanelment for undertaking assignments relating to system audit of trading members.
The module to submit an application for empanelment as system auditor will be made live shortly, and a separate notice will be issued containing the details of the module.
Audit firms must submit an undertaking/affidavit to IND BSE in the prescribed format.
Members are advised to take note and communicate the provisions of this notice to their respective system auditors and ensure compliance.
IND BSE shall accept the system audit report certified by empaneled auditor only with effect from the half-year ending Sep. 30, 2025 onwards.
Document dated Aug. 13, 2025, was received on Aug. 20, 2025 due to a fixed feed.
On Jan. 31, IND SEBI issued guidelines for conduct of system audit.
IND SEBI prescribed guidelines for the conduct of system audit of stock brokers.
This initiative aims to address the complexities and risks which are associated with stock brokers' technology systems and ensure that audits are conducted effectively.
Follows IND SEBI Oct. 2023 issued master circular for stock exchanges, #188261.
Guidelines
Stock exchanges must develop web portal to track entire audit lifecycle, verify auditor presence via geo-location, ensure secure access via one time password authentication.
Auditors must log visits, document findings, collect evidence through the portal, while exchanges will conduct surprise checks, especially for qualified stock brokers (QSBs).
In addition, system audits must follow standardized procedures, covering IT infrastructure, compliance with third-party vendors, and previous technical issues.
Exchanges will empanel auditors based on qualifications, experience while enforcing a two-year cooling-off period after three consecutive audits before reappointment.
Auditors must report tech glitches, verify remediation efforts, assess capacity planning, ensure disaster recovery site compliance; non-compliant stock brokers will face financial penalties, auditors failing to conduct proper audits may be de-empaneled.
Exchanges must submit half-yearly reports on audit findings, compliance actions.
Web portal must be developed within six months of the circular’s issuance, with stock exchanges ensuring adequate technological and human resources for implementation.
Effectiveness
Framework will apply from FY 2025-26 audit cycle, i.e. Apr. 1, 2025 to Mar. 31, 2026.
Web portal must be developed by Jul. 31, 2025.
Aug. 2025 IND BSE Auditor Framework
On Aug. 13, 2025, IND BSE provided the framework for empanelment of auditors, who are desirous of taking up assignments relating to system audit of trading members.
The auditor, audit firm, or company who meets the eligibility criteria prescribed by SEBI/BSE from time to time, shall submit a one-time online application for empanelment for undertaking assignments relating to system audit of trading members.
The module to submit an application for empanelment as system auditor will be made live shortly, and a separate notice will be issued containing the details of the module.
Audit firms must submit an undertaking/affidavit to IND BSE in the prescribed format.
Members are advised to take note and communicate the provisions of this notice to their respective system auditors and ensure compliance.
IND BSE shall accept the system audit report certified by empaneled auditor only with effect from the half-year ending Sep. 30, 2025 onwards.
Document dated Aug. 13, 2025, was received on Aug. 20, 2025 due to a fixed feed.
Regulators
IND BSE; IND SEBI
Entity Types
Auditor; B/D; Corp; Exch; IA
Reference
Nt 20250813-60, 8/13/2025; Cir SEBI/HO/MIRSD/TPD/CIR/2025/10, 1/31/2025; Cir SEBI/HO/MRD2/PoD-2/CIR/P/2023/171, 10/16/2023
