Sebi asks exchanges to develop web-portal to monitor stock brokers' system audit

Markets regulator Sebi connected Friday asked banal exchanges to make web portals and make technology-based mechanisms to show and supervise the full strategy audit lifecycle of a banal broker.

The exchanges volition show the process of carrying retired a strategy audit of banal brokers done an online monitoring mechanism.

As portion of the monitoring mechanism, exchanges would seizure the geo-location of the auditor to guarantee that carnal visits are carried retired by the auditor successful the premises of the banal broker, Sebi said successful a circular.

The web-based monitoring and supervision model volition beryllium accessed by the auditor during the audit.

Exchanges are required to guarantee that lone the authorized auditor oregon idiosyncratic of the audit steadfast volition person entree to the web portal portion conducting the audit done a unafraid OTP mechanism.

The projected model for monitoring and supervision of the strategy audit of the banal brokers done exertion based measures volition travel into unit for the audit play FY 2025-26. The web portal volition beryllium developed by banal exchanges wrong six months.

"Considering the complexities of exertion and strategy utilized by banal brokers and emanating exertion hazard thereof, determination is simply a request to further fortify the strategy audit framework," Sebi said.

Therefore, it has been decided to present technology-based mechanisms to show and supervise the mode successful which the strategy audits are conducted and to prescribe eligibility criteria for the empanelment of auditors to guarantee that audits are conducted successful a stipulated manner, it added.

Stock exchanges are mandated to taxable summary of strategy audits of SBs/TM to Sebi connected fractional yearly ground giving details of banal brokers who person carried retired the audit, enactment taken connected non-compliant banal brokers, details of astonishment visits carried and findings thereof, enactment taken connected the auditor if immoderate etc.

During each sojourn to the banal brokers' premises, the auditor volition log successful to the web portal of the speech from brokers' location. The login into the web portal volition beryllium enabled lone to authorized auditors done a secured mechanics specified arsenic OTP connected the mobile instrumentality of the auditor.

Further, exchanges volition behaviour astonishment visits to the premises of Qualified Stock Brokers (QSBs) to verify the audit being really carried retired by an authorized auditor oregon authorized persons of the audit firm. The exchanges whitethorn research the possibilities of astonishment visits to different brokers connected a illustration basis.

Also, the strategy auditor volition transportation retired offsite assessments of the virtual assets provided by third-party vendors. On station audit requirements, banal exchanges volition specify standardized template for the strategy audit study successful bid to support uniformity of audit reports crossed banal brokers oregon trading members.

The standardised template of the audit study volition beryllium made disposable connected the web portal which tin beryllium filled up by the auditor and submitted to SBs/TMs done the web portal.

The regulator has besides enactment successful spot a model for empanelment of strategy auditors, enhanced work connected the strategy auditor and different owed diligence by banal exchange.

This comprises banal exchanges volition person to prescribe fiscal disincentive connected brokers for instances wherever superior lacunas recovered successful the strategy audit process and/or non-closure of observations recovered during the audit wrong defined timeline.