The Securities Exchange Board of India (“SEBI”), in exercise of powers conferred under Section 11(1) of Securities and Exchange Board of India Act, 1992 read with Regulation 51 of Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018 and Section 19 of the Depositories Act, 1996 read with Regulation 97 of Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018, vide Circular No. SEBI/HO/MRD/TPD/CIR/P/2025/50,[1] dated April 04, 2025 (“Circular”), prescribed a standardized format for system and network audit reports by Market Infrastructure Institutions (“MIIs”). The said prescribed format shall be applicable from the audit period of F.Y. 2024-25, or from the second half of F.Y. 2024-25, as per the frequency of System and Network audit required to be conducted by the MII.
This move follows SEBI’s earlier guidelines set out in the following master circulars:
- Clause 8.1 of the Master Circular dated December 30, 2024, for Stock Exchanges and Clearing Corporations;
- Clause 4.29 of the Master Circular dated December 03, 2024, for Depositories;
- Clause 16.3 of the Master Circular dated August 04, 2023, for the Commodity Derivatives Segment.
SEBI observed that MIIs had been using different templates for their audit reports. Accordingly, to ensure uniformity, enhance data quality, and facilitate regulatory monitoring, SEBI, in consultation with its Technology Advisory Committee (TAC) and the MIIs, has finalized a uniform reporting template, which is enclosed as Annexure A to the Circular.
The standardized format aims to streamline the audit process, ensure the capture of relevant information, and improve traceability of audit findings by assigning unique IDs to each observation.
[1] https://www.sebi.gov.in/legal/circulars/apr-2025/standardized-format-for-system-and-network-audit-report-of-market-infrastructure-institutions-miis-_93324.html