Format for System and Network audit report of MIIs
Standardized format for System and Network audit report of Market Infrastructure Institutions (MIIs)
- SEBI has stipulated the guidelines for System and Network audit for MIIs as mentioned below: –
1.1 Clause 8.1 of Chapter 2of Master Circular No. SEBI/HO/MRD2/PoD-2/CIR/P/2024/181 dated December 30, 2024 for Stock Exchanges and Clearing Corporations.
1.2 Clause 4.29 of SEBI Master Circular No. SEBI/HO/MRD/MRD-PoD-1/P/CIR/2024/168 dated December 03, 2024for Depositories.1.3Clause No. 16.3of SEBI Master Circular No. SEBI/HO/MRD/MRD-PoD-1/P/CIR/2023/136 dated August 04, 2023 for Commodity Derivatives Segment. - Presently, all MIIs are required to conduct System and Network audit as per the aforesaid framework and each MII has adopted different template for System and Network audit report. In view of the same, the format of report adopted by MIIs for System and Network audit was reviewed by SEBI in consultation with the Technology Advisory Committee (TAC) of SEBI. Based on the recommendations of the Committee and in consultation with MIIs, a standardized format for System and Network Audit report for MIIs has been prepared and the same is enclosed as Annexure A.
- The standardized format for System and Network Audit report would help to increase the data quality, captureofrelevant information as per regulatory requirements in a streamlined and standardized manner across MIIs, monitor compliance requirements in a more focused manner, ease of traceability of current/historical open observations found during audit at the end of MII and SEBI by assigninga unique ID to each observation.
- The Circular shall become applicable for audit period FY 2024-25 or second half ofFY 2024-25as per the frequency ofSystem and Network audit required to be conducted by the MII.
- MIIs are required to take necessary steps to put in place systems for implementation of the Circular, including necessary amendments to the relevant bye-laws, rules and regulations, if any.
- This Circular is being issued in exercise of the powers conferred by Section 11(1) of Securities and Exchange Board of India Act, 1992 read with Regulation 51 of Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018 and Section 19 of the Depositories Act, 1996 read with Regulation 97 of Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018 to protect the interest of investors in securities market and to promote the development of, andto regulate the securities market.
- The Circular is issued with the approval of Competent Authority.
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