MANU/SSMD/0065/2011
Ministry : Securities and Exchange Board of India
Department / Board : Market Regulation Department
Circular No.: CIR/MRD/DMS/13/2011
Date : 29.11.2011
Notification/ Circulars Referred:MANU/SPMD/0017/2008 MANU/SPMD/0017/2008
Referred IN
Notification/ Circulars Referred: circular no.
MIRSD/DPS-III/ Cir-22
/2008 dated July 23, 2008 MANU/SPMD/0017/2008
The Managing Director / Executive Director
Stock Exchanges and Depositories
Dear Sir / Madam,
Annual System Audit
Keeping in view the rapid technological developments in the Securities
Markets should not overshadow the risks that these innovations pose to the
efficiency and integrity of markets, SEBI vide circular no.
MIRSD/DPS-III/ Cir-22
/2008 dated July 23, 2008,
had mandated that exchanges shall conduct an annual system audit by a reputed
independent auditor. Similar framework was also prescribed for depositories vide
letter no. MIRSD/DPS-III/132833/2008
dated July 23, 2008.
Based on the discussions with stock exchanges and depositories, and recommendations of Technical Advisory Committee (TAC), the present system audit framework has been reviewed encompassing the System Audit Process, Auditor
Selection Norms, Terms of Reference (TOR), and Audit Report Guidelines.
You are advised to conduct an annual System Audit as per the enclosed System
Audit Framework. The Systems Audit Reports and Compliance Status should be
placed before the Governing Board of the Stock Exchanges / Depositories and the
system audit report along with comments of Stock Exchanges / Depositories should
be communicated to SEBI. Further, along with the audit report, Stock Exchanges /
Depositories are advised to submit a declaration from the MD / CEO certifying
the security and integrity of their IT Systems.
In case the exchanges / depositories have commenced their Annual System
Audit, they may follow existing annual system audit framework of SEBI Circular
issued in 2008. Further, the exchanges /
depositories who are yet to commence Annual System Audit would carry out their
Annual System Audit as per the framework given in this circular.