The Audit under SEBI (Depositories & Participants) Regulation, 1996

The Audit under SEBI (Depositories & Participants) Regulation, 1996

i. It is the duty of every issuer to submit an audit report on a quarterly basis on a recognized stock exchange.

ii. Any difference in the records maintained by the issuer shall be reported to the depositories and stock exchanges.

Internal Audit

The two Depository service providers in India, viz., NSDL and CDSL have allowed Company Secretaries in whole-time practice to undertake internal audit of the operations of Depository Participants (DPs).

Every Depository Participant shall ensure that an internal audit in respect of the operations of the Depository is conducted at intervals of not more than three months by a qualified Chartered Accountant or a Company Secretary holding a Certificate of Practice and a copy of the internal audit report shall be furnished to the Depository.

Every Depository Participant shall ensure that an internal audit shall be conducted in respect of the participant's operations relating to CDS by a qualified Chartered Accountant in accordance with the provisions of the Chartered Accountants Act, 1949 or by a Company Secretary in practice in accordance with the provisions of the Company Secretaries Act, 1980, at such intervals as may be specified by CDS from time to time. A copy of Internal Audit report shall be furnished to CDS.

                                                                           


Concurrent Audit

The process of Demat Account opening, control and verification of Delivery Instructions slips is subject to concurrent audit.

Depository Participants have been advised to appoint a firm of qualified CA/CS holding a certificate of practice for conducting the concurrent audit. However, the participants in case they so desire, may entrust the concurrent audit to their Internal Auditors.

• Issuance of DIS: The procedure followed is as under:-

i. Issuance of DIS booklets;

ii. Existence of control on DIS issued to clients;

iii. Maintenance of records for issuance of DIS booklets in the back office.

• Verification of DIS: The procedure followed is as under:-

i. Date and time stamping on instruction slips;

ii. Blocking of used/lost/stolen instruction slips;

iii. Two-step verification for a transaction for more than Rs. 5 lakhs;

iv. Instruction received from the dormant accounts.


Full form :- 

DIS -  Delivery Instructions slips

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