Sebi orders system audits of MF

  
The latest move by Securities and Exchange Board of India  seeks to give primacy to the importance of systems audit in the technology driven asset management activity. Securities and Exchange Board of India has made it clear that the systems audit should be comprehensive encompassing audit of systems and processes inter alia related to examination of integration of front office system with the back office system.

Accounting system

It should also include fund accounting system for calculation of net asset values, financial accounting and reporting system for the asset management company, Unit-holder administration and servicing systems for customer service, funds flow process, system processes for meeting regulatory requirements, prudential investment limits and access rights to systems interface.  Accordingly, Mutual Funds have been advised to get the above systems audit conducted once in two years.  

The companies  were further advised to place the Systems Audit Report and compliance status before the Trustees of the mutual fund, which thereafter, will be handed over to Securities and Exchange Board of India.

For the financial years April 2008 to March 2010, the systems audit should be completed by September 30, 2010.

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