The International Financial Services Centres Authority (IFSCA), on June 5, 2026, issued a circular prescribing the Annual Compliance Audit Report (ACAR) format and reporting norms for Capital Market Intermediaries (CMIs) operating in IFSCs. The circular mandates all CMIs to submit the ACAR along with the Annual Compliance Audit Checklist (ACAC) to IFSCA by 30 September each year for the preceding financial year. The requirement is applicable from FY 2025-26 onwards and has immediate effect.
The circular standardizes compliance reporting by introducing a common audit framework comprising a general compliance checklist applicable to all CMIs and category-specific checklists based on the intermediary’s registration or authorization. Broker Dealers, Clearing Members and Depository Participants are additionally required to submit the audit report to the respective Market Infrastructure Institutions (MIIs). MIIs have been directed to issue their own compliance checklists, which will form Part-C of the ACAC, and provide consolidated information to IFSCA by 30 November each year.
IFSCA has also clarified auditor eligibility and independence requirements. The compliance audit must be conducted by a peer-reviewed member of the Institute of Chartered Accountants of India (ICAI), Institute of Company Secretaries of India (ICSI), Institute of Cost Accountants of India (ICMAI), or an authorized foreign auditor. An auditor may be appointed for a maximum of three consecutive years, followed by a mandatory two-year cooling-off period. The circular further integrates annual audit reporting requirements for Global Access Providers (GAPs) and Introducing Brokers into the ACAR framework.
[Circular No. IFSCA-DSI/1/2026-Capital Markets]
