The Securities and Exchange Board of India (SEBI) on March 25, 2026, issued clarification regarding eligibility of members of the Institute of Cost Accountants of India to conduct annual audit of Investment Advisers.
SEBI, through its Master Circular for Investment Advisers dated February 06, 2026, had consolidated all regulatory requirements applicable to Investment Advisers (IAs), including provisions relating to annual compliance audits. Earlier, such audits could be conducted by members of the Institute of Chartered Accountants of India (ICAI) or the Institute of Company Secretaries of India (ICSI).
Based on representations from the Institute of Cost Accountants of India and in line with Regulation 19(3) of the IA Regulations, SEBI has now expanded the eligibility to include members of the Institute of Cost Accountants of India (ICMAI). Accordingly, IAs are required to conduct an annual audit through ICAI, ICSI, or ICMAI members within six months from the end of the financial year and submit the audit report, along with any adverse findings and corrective actions, by October 31 of each year.
Further, SEBI has amended provisions requiring IAs to maintain an annual compliance certificate confirming adherence to client-level segregation requirements under Regulation 22. This certificate must also be obtained from ICAI, ICSI, or ICMAI members within six months of the financial year-end and will form part of the compliance audit.
These changes are effective immediately and have been introduced under SEBI’s regulatory powers to strengthen compliance, enhance audit scope, and protect investor interests in the securities market.
[Circular No. HO/38/12/12(1)2026-MIRSD-SEC-FATF/I/7933/2026]
