The Bombay Stock Exchange (BSE) on April 7, 2026, has mandated all trading members to conduct a complete internal audit for the half year ended March 31, 2026, and submit the report electronically via the BEFS (BSE Electronic Filing System) portal by May 31, 2026. The Exchange has reiterated that only reports certified by empanelled auditors will be accepted, in line with earlier notices on auditor eligibility and empanelment framework, along with compliance with the relevant Securities and Exchange Board of India (SEBI) circular on appointment and rotation of internal auditors.
The notice introduces key changes in audit procedures, including revised sampling methodology (Annexure III & IIIA), mandatory detailed reporting for non-compliances (number of instances, deviations, and financial impact), and verification of compliance with corrective actions prescribed by SEBI inspections. Where applicable, auditors must submit an additional compliance certificate (Annexure VI), without which the audit report will be considered incomplete. Specific focus is also placed on cases involving prior inspection-based action letters, requiring targeted sampling.
Further, additional disclosures—previously part of Risk-Based Supervision—are now to be included in the Internal Audit Report, such as overseas operations, fraud instances, penalties, and SEBI inspection details. Critical non-compliances like client fund shortfalls or assured returns schemes must be reported within two days. Non-compliance with submission timelines or failure to close audit observations within stipulated timelines will attract penal action as per applicable Exchange circulars.
[Notice No. 20260407-22]
