Norms for Internal Audit Mechanism and composition of the Audit Committee of Market Infrastructure Institutions
Summary
This circular prescribes norms for the internal audit mechanism and the composition of the Audit Committee for Market Infrastructure Institutions (MIIs). It mandates that MIIs conduct annual internal audits by independent firms and report directly to their Audit Committees. Additionally, it restricts Executive Directors from serving on Audit Committees while granting auditors and Key Management Personnel the right to be heard without voting rights.
Text
Every MII shall conduct internal audit of all functions and activities of the MII ... at least once in a Financial Year.
The internal auditor of the MII shall be an independent audit firm(s). The MIIs shall have a policy for appointment of internal auditors approved by the Audit Committee and governing board of the MII.
Internal auditor of an MII shall report only to the Audit Committee of the MII.
The internal auditor after incorporating comments of the HoDs shall share the final report with the Audit Committee in a time bound manner.
The internal auditor of the MII shall appraise the Audit Committee, at least once in every six months within 60 days from the end of September and March, on critical issues concerning the MII, in the absence of the management.
The Audit Committee of the MII shall not consist of any Executive Director (including the Managing Director) of the MII;
The auditors of the MII and the Key Management Personnel (KMPs) shall have a right to be heard in the meetings of the Audit Committee when it considers the auditor‘s report but shall not have the right to vote;
The provisions of the circular shall be applicable from the 90th day of issuance of the circular.
This circular is issued in exercise of the powers conferred under section 11(1) of the Securities and Exchange Board of India Act 1992 read with regulation 51 of the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018...
Source: SecMarx — Norms for Internal Audit Mechanism and composition of the Audit Committee of Market Infrastructure Institutions. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.