MCX Circular on - Submission of Internal Audit Report for the half year ended on September 30, 2025

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Date of Issue: 13-10-2025  
           
Issuer: MCX

Submission of Internal Audit Report for the half year ended on September 30, 2025

Highlights of MCX Circular dated October-13-2025

This is further to the provisions of the Rules, Bye-Laws and Business Rules of the Multi Commodity Exchange of India Limited (MCX) and in reference to the Exchange Circular nos. MCX/INSP/294/2016 dated September 26, 2016, MCX/INSP/295/2016 dated September 26, 2016 and MCX/INSP/343/2017 dated September 25, 2017, respectively.

All Members of the Exchange are directed that internal audit on a half yearly basis is required to be conducted by independent qualified Chartered Accountants or Company Secretaries or Cost and Management Accountants who are in practice and who do not have any conflict of interest.

Accordingly, all Members of the Exchange are required to appoint Internal Auditors and create login ID for the Internal Auditors for submission of Internal Audit Report for the half year ended on September 30, 2025. The link for Internal Audit report submission is available as under:

https://member.mcxindia.com/ 

Please note that the due date for submission is November 30, 2025.

The internal auditors shall electronically submit the audit report to the member, who shall place it before its Board of Directors/Proprietor/Partners and shall forward the same along with para-wise comments of the management to the Exchange electronically on or before November 30, 2025.

Please note that the Internal Audit Certificate and Audit Report has to be digitally signed by the Auditors and member shall incorporate their management comments against each of the Non-Compliances reported and submit the same to the Exchange after signing it digitally. It may be noted that no documents are to be submitted in physical form to the Exchange.

Members’ attention is drawn to Exchange circular nos. MCX/INSP/372/2022 dated June 24, 2022 and MCX/INSP/662/2024 dated October 03, 2024 wherein it has been prescribed that the trading member shall submit an undertaking to Exchange on half yearly basis along with Internal Audit Report confirming that the penalty levied by clearing corporations on account of “short/non-collection of upfront margins from clients” is not being passed on to respective clients. Accordingly, the facility to submit the same has been provided under ‘Internal Audit Tab’ in the Enhanced Supervision portal. The undertaking submitted by the member shall be digitally signed by the proprietor or partner or the designated director of the company.

Members attention is also drawn to the Exchange circular nos. MCX/INSP/672/2023 dated October 05, 2023 and MCX/INSP/180/2024 dated March 26, 2024 regarding eligibility criteria for internal auditors.

Further, Internal Auditors are advised to take note of the following while carrying out the Audit:

1. There are certain changes in the sampling criteria and methodology for sample selection compared to previous half year submission. Auditors are advised to refer Annexure III carefully before initiating the audit.
   
   
2. Auditors are required to mandatorily adhere to the sample selection guidelines specified in the circular as per Annexure III and mention the sample size selected along with the details of the instances of Non-Compliance (if any) against each of the checklist points in the Internal Audit Report.
   
   
3. Internal Auditors are mandatorily required to upload the list of all samples selected and supporting documents, using the upload functionality available for each head of area of verification at the time of uploading the Internal Audit report on the portal. Fo submissions pertaining to Qualified Stock Broker (QSB-Annexure VII) data shall be submitted under point no 19 of Area of Verification. All working papers and records with respect to the Audit should be retained by the Auditors for verification and sharing with the Exchange, as and when required.
   
   
4. As per the Exchange circular no. MCX/INSP/322/2025 dated June 30, 2025, regarding “Monitoring corrective actions taken by the Members pursuant to Inspection by SEBI”.
   
   Additional submission of “Certificate of Compliance” is applicable to all those members, where SEBI has issued Administrative Warning Letters (AWL). Empaneled Internal Auditor shall submit Certificate of Compliance on AWL. Member response on Administrative Warning Letter shall be available to the Auditor for verification under Auditor Login.
   
   
5. For each “Not Complied” observation, wherever applicable the auditor shall mandatorily provide the “Complete Auditor remarks”, “No. of instances where noncompliance is observed”, “% of Instances where Non-compliance is observed” and “Amount/value involved where Non-compliance is observed” while submitting the Audit report.
   
   
6. It is mandatory to mention Unique Document Identification Number (UDIN) on the Certificate of Compliance (If applicable) and Internal Audit Certificate. Hence, auditors shall ensure that Certificate of Compliance and Internal Audit Certificate mandatorily contain different UDIN.
   
   
7. Internal auditor shall report directly to the Exchange in the event of non-cooperation by the member by sending an email at inspe...@mcxindia.com. In case of resignation by the auditor from Internal Audit Assignment, Internal auditor shall communicate the reason for such resignation to the Exchange.
   
   
8. The internal auditors are also required to immediately report critical non-compliances viz; shortall of client funds/networth wherein such shortalls are not recouped and offering fixed/assured/periodic returns to clients / mobilizing deposits from investors observed during the internal audit of trading members by an email to the email id – Inspe...@mcxindia.com as per Exchange Circular No. MCX/INSP/356/2025 dated July 24, 2025.

Annexures are applicable for the Internal Audit report for half year ended on September 30, 2025, are enclosed in the circular.

The Exchange will initiate appropriate actions – remedial, penal or disciplinary – againstthe members where deficiencies / non-compliances / violations are noticed in audit reports or where audit report has not been received on time and the same will be intimated separately as per Exchange circular no. MCX/INSP/525/2025 dated October 10, 2025.

Further, Members are advised to adhere to the norms prescribed under clause 4.2 of SEBI circular no. SEBI/HO/MIRSD/MIRSD2/CIR/P/2016/95 dated September 26, 2016, w.r.t Appointment and Rotation of Internal auditors. Accordingly, members shall not appoint or re-appoint the internal auditor who has completed its term as specified under clause 4.2.1.2 (a) and 4.2.1.2 (b) of aforesaid SEBI circular and Exchange circular nos. MCX/INSP/672/2023 dated October 05, 2023 and MCX/INSP/180/2024 dated March 26, 2024.

In case of any clarification or assistance required in the implementation of this circular, you may contact :   

Kaushik Jethwa - kau...@secmark.in/ 9870210171