Member’s attention is drawn to SEBI circular no. CIR/MRD/DMS/34/2013 dated November 6, 2013; and Exchange notice no. 20131107-6 dated November 7, 2013, on the Annual System Audit of Stockbrokers / Trading members. and Exchange notice no. 20230331-66 dated March 31, 2023, on Revised and Standardized Terms of Reference for System Audit of Stockbroker / Trading member across Exchanges.
Accordingly, trading members are required to carry out system audit of their trading facility for the period ended March 31, 2024, as per the applicability criteria given below in Table 1:
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Table 1: Applicability of Terms of Reference
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Sr. No.
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Particulars
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Broker
Type*
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Terms of Reference
(ToR)
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Presence of broker
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Periodicity of submission of report
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1
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IML / IBT / DMA / STWT / SOR users and who may also be Type I brokers.
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II
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TOR II
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Presence in not more than 10 locations and number of terminals are not more than 50.
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Once in two
years. **
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Presence in more than 10 locations or number of terminals are more than 50.
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Annual
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2
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Algo users and who may also be Type II brokers
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III
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TOR III
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Not Applicable
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Half yearly
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**Annual, if depository participant or is involved in offering any other financial services.
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* Type of stock broker as specified in SEBI circular CIR/MRD/DMS/34/2013 dated November 06, 2013
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Stock brokers who are using trading software provided by the Exchange (BOLT/BOLT PLUS) and/or software provided by Exchange owned application Service Provider (ASP) shall not be covered in the system audit.
Timelines for submission of System Audit Report is given below in Table 2:
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Table 2: Report Submission Timelines
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Audit Period
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Due Date for Submission
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Preliminary Audit Report submission
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Corrective Action Report (If Applicable)
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Half Yearly
(October 2023 - March 2024)
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30-Jun-24
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30-Sep-24
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Yearly Submission
(April 2023 - March 2024)
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30-Jun-24
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30-Sep-24
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Once in 2 Years
(April 2022 – March 2024)
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30-Jun-24
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30-Sep-24
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Exchange has identified the broker type and periodicity of submission of the system audit report based on available data / information and is displayed in BEFS Portal. In case of any discrepancy, stockbrokers are requested to immediately communicate on email id bse.msc(at)bseindia.com.
Members may note that the above-mentioned reports are required to be submitted only in electronic form through BEFS (BSE Electronic Filing System) – https://befs.bseindia.com.
All Trading members are requested to take note that, for each non-compliance reported by the auditor, trading members are required to submit corrective action taken report as per above mentioned timelines. On review of details of corrective action submitted by trading member, the auditor shall submit the status of compliance as Compliant or Non-Compliant on BEFS.
Submission of System Audit Report with Management comments shall be considered complete only after Member submits the report to the Exchange and receives an acknowledgment email. Saved reports/reports submitted by auditor will not be considered as final submission. Further, the auditor must provide compliance status for each TOR item as Compliant/Non-Compliant/Not Applicable and in case of any TOR item which is not applicable, auditor is required to provide justification for the non-applicability of said TOR.
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 details of Penalties/disciplinary action(s)/charges have been provided in Annexure V.
Stockbrokers are requested to refer to the following documents while submitting the system audit report.
Ø Auditor Selection Norms – Annexure I
Ø Audit Process – Annexure II
Ø Auditor User Manual for System Audit Report (SAR) – Annexure III
Ø Member User Manual for System Audit Report (SAR) – Annexure IV
Ø Penalty/disciplinary action for Delay/Non-submission of Preliminary?Audit Report / Corrective Action Taken Report and non-Closure of observations – Annexure V
Ø Terms of Reference (TOR) for System Audit Report - II and III
All Trading Members are advised to take note of the above and comply to avoid disincentives.
In case of any queries/clarifications, you may contact us on the below numbers in Table 4 below.
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Table 4: Contact Details
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Sr. No
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Purpose
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Contact Nos.
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Email ID
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1
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System Audit XBRL related issues
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18002330445
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Bse(dot)xbrl(at)bseindia.com
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2
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System Audit Process related
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022 – 22725841
/5842/8888
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Bse(dot)msc(at)bseindia.com
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For and on behalf of BSE Ltd
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Shri. Devendra Kulkarni
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Additional General Manager
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