BSE Circular on - Guidelines for Annual Compliance Audit requirement
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Date of Issue: 2-7-2025
Issuer: BSE
Guidelines for Annual Compliance Audit requirement
Highlights of BSE Circular dated July-2-2025
This is with
reference to SEBI Circular no. SEBI/HO/MIRSD/ MIRSD-PoD-1/P/CIR/2025/004 dated
January 8, 2025, and the Exchange Notice no. 20250110-3 dated January 10, 2025, with respect to
Guidelines for Research Analysts.
Point 2(xiv) of the above-mentioned circular details about Annual Compliance
Audit requirements:
- As per regulation 25(3) of the RA Regulations, RA or research entity shall conduct annual audit in respect of compliance with RA Regulations.
- Annual compliance audit report shall specify each of the provisions of the RA Regulations and the circulars and guidelines issued thereunder upon which compliance is reported.
- A research analyst or research entity shall –
(i) complete the annual compliance audit within six months from the end of each financial year and submit a compliance audit report to RAASB/SEBI within a period of one month from the date of the audit report.
(ii) submit adverse findings of audit, if any, along with action taken thereof duly approved by the individual RA or management of non-individual RA or research entity to RAASB/SEBI within a period of one month from the date of the audit report but not later than October 31st of each year for the previous financial year; and
(iii) maintain on record an annual certificate from a member of ICAI/ ICSI/ICMAI or from an auditor confirming compliance with client level segregation requirements. Such annual certificate shall form part of the compliance audit. - RA/research entity shall publish the status of the compliance audit report on its website and shall also publish the adverse findings of audit, if any, along with the action taken thereof on its website. RA/research entity shall provide the compliance audit report to its clients.
- RA/research entity shall ensure compliance with the additional audit requirements under this clause starting with for audit report of the financial year ending March 31, 2025.
In view of the above,
the format for the “Annexure to the audit report” has been attached herewith in
which the auditor shall specify compliance against each of the provisions of
the RA Regulations and the circulars and guidelines.
It may be noted that portal for uploading the ACR is under development which
will facilitate seamless submission of audit report, annexure to audit report,
client level segregation certificate and Action taken report for adverse
findings during audit by Research Analysts. RAs will have 2 options for
submission i.e. by appointing auditor through system or direct submissions by
RAs.
The process flow for both the modes is explained in attached flow chart.
Please note that only portal-based submission shall be considered. Submission
through email shall not be considered.
Golive date for the ACR module shall be intimated via separate circular. Post
which the Research Analysts shall use their existing RA login credentials of
the Exchanges used for periodic submission / registration for ACR submission.
There is NO need to create new logins for this purpose. In case you are unaware
about your login credentials please mark an email on iara.co...@bseindia.com
All the Research Analysts are advised to take note and comply.
In case of any clarification or assistance required in the implementation of this circular, you may contact
Kaushik Jethwa - kau...@secmark.in / 9870210171
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secmarkupdates
Cracking your trading password can be easier than it appears.
Contact: 9869265949,9870210171, in...@secmark.in, kau...@secmark.in
Date of Issue: 2-7-2025
Issuer: BSE
Guidelines for Annual Compliance Audit requirement
Highlights of BSE Circular dated July-2-2025
This is with
reference to SEBI Circular no. SEBI/HO/MIRSD/ MIRSD-PoD-1/P/CIR/2025/003 dated
January 8, 2025, and the Exchange Notice no. 20250110-1 dated January 10, 2025, with respect to
Guidelines for Investment advisers.
Point 2(xiii) of the above-mentioned circular details about Compliance Audit
requirements:
- As per regulation 19(3) of the IA Regulations, IA shall conduct annual audit in respect of compliance with SEBI (Investment Advisers) Regulations, 2013
- Annual compliance audit report shall specify each of the provisions of the IA Regulations and the circulars and guidelines issued thereunder upon which compliance is reported.
- An IA shall –
(i) complete the annual compliance audit within six months from the end of each financial year and submit a compliance audit report to IAASB/SEBI within a period of one month from the date of the audit report.
(ii) submit adverse findings of audit, if any, along with action taken thereof duly approved by the individual IA or management of non-individual IA to IAASB/SEBI within a period of one month from the date of the audit report but not later than October 31st of each year for the previous financial year; and
(iii) maintain on record an annual certificate from a member of ICAI/ ICSI/ ICMAI or from an auditor confirming compliance with client level segregation requirements. Such annual certificate shall be obtained within six months of the end of the financial year and form part of compliance audit, in terms of Regulation 19(3) of the IA Regulations. - IA shall publish the status of the compliance audit report on its website and shall also publish the adverse findings of audit, if any, along with the action taken thereof on their website. IA shall provide the compliance audit report to its clients.
- IA shall ensure compliance with the additional audit requirements under this clause starting with for audit report of the financial year ending March 31, 2025.
In view of the above,
the format for the “Annexure to the audit report” has been attached herewith in
which the auditor shall specify compliance against each of the provisions of
the IA Regulations and the circulars and guidelines.
It may be noted that portal for uploading the ACR is under development which
will facilitate seamless submission of audit report, annexure to audit report,
client level segregation certificate and Action taken report for adverse
findings during audit by Investment Adviser. IAs will have 2 options for
submission i.e. by appointing auditor through system or direct submissions by
IAs.
The process flow for both the modes is explained in attached flow chart.
Please note that only portal-based submission shall be considered. Submission
through email shall not be considered.
Golive date for the ACR module shall be intimated via separate circular. Post
which the Investment Advisers shall use their existing IA login credentials of
the Exchanges used for periodic submission / registration for ACR submission.
There is NO need to create new logins for this purpose. In case you are unaware
about your login credentials please mark an email on iara.co...@bseindia.com
All the Investment Advisers are advised to take note and comply.