The Bombay Stock Exchange (BSE) on April 22, 2026, issued the notification regarding the System Audit of Trading Members ending March 31, 2026
The following has been stated namely: -
• The circular outlines requirements for System Audit of stockbrokers/trading members as per Securities and Exchange Board of India and exchange guidelines.
• Applicability depends on broker type:
o Type II (IML/IBT/DMA/STWT/SOR users) → audit every 1–2 years based on size.
o Type III (Algo users) → audit half-yearly.
• Brokers using exchange-provided software (e.g., BOLT/BOLT PLUS) or ASP software are exempt from system audit.
• Audit period ending March 31, 2026 must follow defined timelines:
o Preliminary report due June 30, 2026
o ATR due September 30, 2026
• Only empanelled system auditors approved by BSE Limited can conduct audits.
• Trading members must submit audit plans (auditor details, systems, locations) via BEFS portal by June 05, 2026.
• Auditors must record geo-location, visit details, and team info during physical audits using system tools.
• Both auditors and trading members must retain audit records and evidence for at least 3 years.
• Reports must include compliance status for each TOR item and supporting documents like:
o Algo MIS report
o Version confirmation
o Assessment details
o Physical visit data
• Non-compliance requires Action Taken Report (ATR) validated by the same auditor, and failure may lead to penalties or disciplinary action, especially for algo trading violations.
[Notification No. 20260422-34]
