Sebi rejigs audit rules for market players

“Based on discussions with stock exchanges and depositories and recommendations of Technical Advisory Committee, the present system audit framework has been reviewed encompassing the system audit process, auditor selection norms, terms of reference and audit report guidelines,” it said in a circular.

“Stock exchange/depository may negotiate and board of stock exchange/depository shall appoint the auditors. The auditors can perform a maximum of three successive audits,” it said.

The audit report should have specific compliance and non-compliance issues, observations for minor deviations as well as qualitative comments for scope for improvement. Besides, it should also take previous audit reports in consideration. Sebi added: “Along with audit report, stock exchanges/depositories are advised to submit a declaration from the Managing Director/Chief Executive Officer certifying the security and integrity of their IT Systems.”

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