MCX Circular on - Submission of Half-yearly Internal Audit Report by Clearing Members (ITCM & PCM) for half year ended September 30, 2025
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Issuer: MCX
Submission of Half-yearly Internal Audit Report by Clearing Members (ITCM & PCM) for half year ended September 30, 2025
Highlights of MCX Circular dated October-13-2025
This is to inform that all Clearing Members undertaking clearing activities, for at-least one trade during the period from April 01, 2025 till September 30, 2025, 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 Multi Commodity Exchange Clearing Corporation Limited (MCXCCL).
It is to be noted that the due date to submit the Internal Audit Report is within two months from the end of half year i.e., for the half year ended September 30, 2025, the due date is November 30, 2025.
The submissions shall be made through the Member Reporting Portal (MRP) of MCXCCL as well as to the email ID “inspe...@mcxccl.com” with the subject line as “Internal Audit Report- Name of the Clearing Member (Clearing Member Code) – September 2025”. Detailed manual for submission of Internal Audit Report through MRP is explained in Annexure- A
Further, Internal Auditors are advised to take note of below while carrying out the Audit:
1. 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.
2. 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).
3. 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 V.
4. For the verification of the area “Bank Guarantee (BG) created Out of Client Funds”, the Auditors are required to verify for the period between April 01, 2025 till September 30, 2025 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 V.
5. The Internal Audit Certificate (Annexure I) should be digitally signed.
6. Annexure II which is a Format of Internal Audit Report shall be submitted in excel file and as a PDF document. PDF version of Annexure II shall be digitally signed by both the auditor and the clearing member along with management comments of the clearing member.
Please find enclosed the following Annexures applicable for the Internal Audit Report for half year ended September 30, 2025:
- Internal Audit Certificate - Annexure I
- Format of Internal Audit Report - Annexure II
- Guidelines on sample selection & other points to be noted - Annexure III
- List of indicative SEBI/MCXCCL/MCX circulars- Annexure IV
- List of samples verified - Annexure V
Please note that, only internal audit report with complete annexures shall be treated as validsubmission to MCXCCL.
The penalties/ disciplinary actions for late/ non-submission of the Internal Audit Report shall be as per MCXCCL/INSP/078/2024 dated April 01, 2024. The penalties/ disciplinary action for noncompliances reported in the Internal Audit Report shall be as prescribed by MCXCCL Circular No. MCXCCL/INSP/001/2024 dated January 01, 2024.
As advised by SEBI and in order to enhance the ease of doing compliance and reduce operational difficulties faced by Members/Audit Firms, it has been decided that only the auditors empaneled with any of the Exchange(s), shall be eligible to conduct internal audit of the Clearing Members of any of the Clearing Corporations.
Members are advised to adhere to the norms prescribed under clause 4.2 of SEBI circular SEBI/HO/MIRSD/MIRSD2/CIR/P/2016/95 dated September 26, 2016, w.r.t. Appointment and Rotation of Internal auditors.
The relevant provisions of clause 4.2. of the said SEBI circular dated September 26, 2016 is mentioned in Annexure VI.
In case of any clarification or assistance required in the
implementation of this circular,
you may contact : Kaushik Jethwa
at kau...@secmark.in and 9870210171.