The National Stock Exchange of India Limited (NSE), on June 15, 2026, introduced a new compliance framework to facilitate timely closure of non-compliances reported in Internal Audit Reports submitted by Clearing Members. Under the revised mechanism, Clearing Members must submit an Action Taken Report (ATR) for all reported non-compliances, duly certified by an empanelled Internal Auditor, confirming corrective action and covering at least one month of sample verification. The framework applies to all internal audit reports for the half-year ended March 31, 2026 and onwards.
The circular prescribes that all non-compliances must be rectified within two months from the due date of submission of the Internal Audit Report. Accordingly, the due date for submission of ATRs shall be July 31 for the audit period ended March 31 and January 31 for the audit period ended September 30. Failure to submit the ATR within the stipulated timeline, or inability to close reported observations, will attract enforcement actions in accordance with Circular No. NCL/CMPL/59930 dated December 26, 2023 and other applicable penalty frameworks.
Further, NCL clarified that critical violations such as misutilisation of client collateral, net worth deficiencies, or other serious compliance breaches will continue to attract immediate regulatory action without waiting for ATR submission. The circular also reiterates the requirements relating to appointment and rotation of internal auditors as prescribed under the relevant SEBI framework, including tenure restrictions and cooling-off periods for individual auditors and audit firms to ensure independence and objectivity in internal audits.
[Circular Ref. No. 22/2026]
