To All Clearing Members (Clearing for other Stock-Broker and/or Custodial Participants Code)
This is with reference to Notice no. 20230921-16 dated September 21, 2023 wherein it was informed that all Clearing Members undertaking clearing activities, for at-least one trade during the period from April 01, 2023 till September 30, 2023, for other stock-brokers and/or for custodian participants code (their direct trading clients or otherwise) are required to carry out Internal Audit and submit the report to Indian Clearing Corporation Limited. (ICCL). For interoperable segments Clearing Members who have selected ICCL as Designated Clearing Corporation are required to submit the report as per the aforesaid requirement.
It is to be noted that the due date to submit the Internal Audit Report is within two months from the end of the half year ended September 30, 2023 that is November 30, 2023.
Clearing Members are required to upload the Internal Audit Report online through Electronic Filing system (IEFS). The path for submission of Annual return is as below:
https://iefs.bseindia.in >> Internal Audit Report
Further, Internal Auditors are advised to take note of below while carrying out the Audit:
1. The Internal Audit Certificate (Annexure I) should be digitally signed – Annexure I
2. In cases where samples have been prescribed, auditors are required to procure the data from the clearing members. Auditors are advised to refer Annexure III carefully before initiating the audit. The samples for parameters/ criteria shall be as per the “Guidelines on sample selection” prescribed in Annexure III and the data required for the same may be sourced from the member.
3. For each “Not complied” observation, wherever applicable, the auditor shall mandatorily provide the “no. of instances verified” and “Amount/value involved where non-compliance is observed” while submitting the Report. Further, for each “Not Applicable” Points, appropriate justifying remarks are mandatory to be provided.
4. Internal auditors are required to give the details of the sample verified (sample date, shortlisted sample etc) wherever applicable. The formats for the same are given in Annexure IV.
5. For the verification of the area “Bank Guarantee (BG) created Out of Client Funds”, the Auditors are required to verify for the period between May 1, 2023 to September 30, 2023 whether all the BGs comply with SEBI circular dated April 25, 2023 and give the details of the BGs verified in the format as given in Annexure IV.
6. The Internal Audit Certificate (Annexure I) should be digitally signed.
7. The Annexure II which is the Format of Internal Audit Report shall be submitted in PDF document. The PDF document shall be digitally signed.
Please find enclosed the following Annexures applicable for the Internal Audit Report for half year ended September 30, 2023:
· Internal Audit Certificate - Annexure I
· Format of Internal Audit Report - Annexure II (Excel File-"IARICCLSEP23")
· Guidelines on sample selection & other points to be noted - Annexure III
· List of samples verified - Annexure IV
The penalties/disciplinary actions for late/non-submission of the Internal Audit Report shall be as per ICCL notice no. 20230921-16 dated September 21, 2023. The penalties/disciplinary action for non-compliances reported in the Internal Audit Report shall be as prescribed by ICCL circular no. ICCL notice no. 20210817-28 dated August 17, 2021 or any other relevant circular that may be issued by ICCL from time to time.
In case of any queries members may contact the following officials
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Name of Officials
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Direct Line Number
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Email
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Sneha Sahadevan
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022-22725075
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iccl.membership@icclindia.com
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Praveen Poojary
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022-22728788
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G.V. Kumar
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022-22728365
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For and on behalf of the Indian Clearing Corporation Ltd.
Ganesh Kanaujiya
Senior Manager
Membership & Inspection
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