SEBI makes half-yearly auditing mandatory for brokers
22 August 2008
Mumbai: Stock market regulator Securities and Exchange Board of India (SEBI) has asked stock brokers/clearing members of stock exchanges to carry out complete internal audit on half-yearly basis. By independent chartered accountants. The audit must include entire internal control system of brokers or clearing members, it said.
The audit must be undertaken by independent qualified chartered accountants and the first audit period should be from 1 October 2008 to 31 March, SEBI said.
SEBI has asked the stock exchanges to make necessary amendments to the relevant bylaws, rules and regulations for immediate compliance with the decision.
The move is expected to ensure compliance with SEBI norms and bring in more efficiency in the system. It will also help in ascertaining that 'Know Your Customer' norms have been followed, the regulator said.
Apex accounting body ICAI welcomed the move, saying, it would ensure more transparency in the way the stock market worked.
''It will help in ensuring reliable internal audit and bring in more transparency in the market. Earlier, it was not mandatory for the internal audit to be done by an independent CA. This circular makes it mandatory, which is certainly a good move," ICAI president Ved Jain said.