To All Trading Members,
This is further to the Exchange Notice no. 20231023-2 dated October 23, 2023 wherein all Stock Brokers / Trading members were directed to submit System Audit Report for half year ended September 30, 2023 to the Exchange on or before November 30, 2023 in electronic form through BEFS (BSE Electronic Filing System). Kindly note that no documents are to be submitted in physical form.
Stock Brokers / Trading members may note that the System Audit Report for the half year ended September 30, 2023 is to be submitted in electronic form only through BEFS (BSE Electronic Filing System) and the module for submission is now enabled at following link: http://befs.bseindia.com -> System Audit Report
Stockbrokers / Trading members are requested to refer to the guideline documents available in Exchange Notice no. 20231023-2 dated October 23, 2023 while submitting the report.
Stockbrokers / Trading members are requested to take note of the Exchange circular 20231005-54 dated October 05, 2023, regarding “Revised Penalties/disciplinary action(s)/charges for System Audit Report & Cyber Security and Cyber Resilience Audit Report related submissions”.
The following penalty / disciplinary actions as provided in Table A would be initiated against the Trading Member for Delay / Non-submission of Preliminary Audit Report / Corrective Action Taken Report and Follow-on audit report.
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Table A: Penalty / disciplinary action for Delay / Non-submission of Preliminary Audit Report / Corrective Action Taken Report / Follow on audit report and non-Closure of observations
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Details of Violation
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Period of violation
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Penalty / disciplinary actions
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Penalty / disciplinary action in case of repeated violation
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Delay / Non-Submission of Preliminary audit / ATR / Follow-on audit report as recommended by the auditor in case of System audit report / cyber security and cyber resilience audit report.
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From 1st day to 7th day:
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Charges Rs. 1,500/- per day for Non QSB & Rs. 3,000/- per day for QSB from the due date till first 7 calendar days or submission of report, whichever is earlier.
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In case of a repeat instance by the Member, levy of applicable monetary penalty along with an escalation of 50%.
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From 8th day to 21st day:
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Charges of Rs. 2,500/- per day for Non QSB & Rs. 5,000/- per day for QSB from 8th calendar day after the due date to 21st calendar day or submission of report, whichever is earlier.
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Levy of applicable monetary penalty along with an escalation of 50%.
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From 22nd day onwards:
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In case of non-submission of report till 21st calendar days, new client registration shall be prohibited and notice of 7 calendar days for disablement of trading facility till submission of report, shall be issued. The disablement notice issued to the trading member will be shared with all the Exchanges for information.
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After 28th day:
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In case of non-submission of report by 28th calendar day, Trading member shall be disabled in all segments till submission of report.
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Further, Stock Brokers / Trading members are also required to submit closure status of all the Non-Compliances reported in System Audit by submitting Corrective Action Taken Report (ATR) i.e., within 3 months from the due date of submission of Preliminary Audit Report. In order to ensure strict adherence for closure of Non-Compliances within the prescribed timelines, following penalty as provided in Table - B shall be Applicable for each High / Medium / Low risk Non-compliance, which has not been closed in ATR as per prescribed timelines.
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Table –B
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Risk rating reported by auditor
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Applicable penalties for each High / Medium / Low risk non-closure of Non-Compliances, which have not been closed in ATR (i.e., within prescribed timelines of submission of due date of preliminary audit report)
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Non QSB Trading Members
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QSB Trading Members
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High Risk
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15,000
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30,000
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Medium Risk
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7,500
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15,000
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Low Risk
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2,500
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5,000
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o In case observations are not closed by trading members within three weeks from the due date for submission of Action Taken Report (ATR), new client registration to be prohibited and notice of 7 days for disablement of trading facility till closure of observation(s).
o The disablement notice issued to the trading member shall be shared with all the Exchanges for information. In case of non-closure of observation(s) within four weeks from the due date of submission of ATR, Trading member shall be disabled in all segments until closure of observations(s).
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Stock brokers are requested to refer to the following while submitting the System Audit Report.
Ø Auditor User Manual – Annexure I
Ø Member User Manual – Annexure II
It may be noted that submission of System Audit Report shall be considered complete only after Member submits the digitally singed report to the Exchange and receives an acknowledgment email. Saved reports / reports submitted by auditor will not be considered as final submission to Exchange.
In case of any queries / clarifications, you may reach us on the following contact details.
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Table 2: Submission Related Contacts
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Purpose
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Contact Nos.
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Email ID
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System Audit XBRL related issues
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1800233 0445
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xbrl.helpdesk(at)microvistatech.com
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System Audit Process related
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2272 5841
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bse.msc(at)bseindia.com
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For and on behalf of BSE Ltd.
Balaji Venketeshwar Devendra Kulkarni
Group CISO Additional General Manager
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