On Oct. 17, 2025, IND BSE reminded stockbrokers to appoint auditors only from empanelled list, submit an audit plan via the BEFS portal detailing systems, locations, and audit schedule.
During physical visits, auditors must log into the BSE portal via the member’s network to record geo-location, visit details, and interactions; both trading members and auditors must retain audit records and evidence for three years.
Auditors must submit assessment detail reports, verify Algo ID compliance (38 checks), and confirm software version compliance via dedicated links.
Audit submission is complete only after filing the Algo MIS, version confirmation, assessment detail, physical visit, and management comment reports.
Reports must be approved by governing board/SCOT (for QSBs) or proprietor/director (for others) before submission; each terms of reference (TOR) item must be marked as compliant/non-Compliant/not applicable, with justification where relevant.
Action taken report (ATR), where applicable, must be validated by the same auditor and resubmitted through BEFS after corrective actions.
Members should review Nt 20251010-20 (dated Oct 10, 2025) for penalties and disciplinary actions related to non-compliance.
The deadline for the preliminary audit report is on Nov. 30, 2025; ATR shall be submitted by Feb. 28, 2026.
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.
Oct. 2025 IND BSE Key Guidelines
On Oct. 17, 2025, IND BSE reminded stockbrokers to appoint auditors only from empanelled list, submit an audit plan via the BEFS portal detailing systems, locations, and audit schedule.
During physical visits, auditors must log into the BSE portal via the member’s network to record geo-location, visit details, and interactions; both trading members and auditors must retain audit records and evidence for three years.
Auditors must submit assessment detail reports, verify Algo ID compliance (38 checks), and confirm software version compliance via dedicated links.
Audit submission is complete only after filing the Algo MIS, version confirmation, assessment detail, physical visit, and management comment reports.
Reports must be approved by governing board/SCOT (for QSBs) or proprietor/director (for others) before submission; each terms of reference (TOR) item must be marked as compliant/non-Compliant/not applicable, with justification where relevant.
Action taken report (ATR), where applicable, must be validated by the same auditor and resubmitted through BEFS after corrective actions.
Members should review Nt 20251010-20 (dated Oct 10, 2025) for penalties and disciplinary actions related to non-compliance.
The deadline for the preliminary audit report is on Nov. 30, 2025; ATR shall be submitted by Feb. 28, 2026.
Regulators
IND BSE; IND SEBI
Entity Types
Auditor; B/D; Corp; Exch; IA
Reference
Nt 20251017-29, 10/17/2025; 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
