Sebi's New Era: Technology-Driven Audit Supervision for Stock Brokers

Sebi has directed stock exchanges to create technology-based mechanisms for monitoring and supervising the system audit lifecycle of stock brokers. This includes developing web portals, using secure OTP mechanisms for access, and ensuring physical audits via geo-location tracking. The system will begin for FY 2025-26 audits.

Sebi, the markets regulator, has mandated stock exchanges to craft web portals and establish technology-driven mechanisms to oversee the entire system audit lifecycle for stock brokers. This move is aimed at strengthening the audit system by integrating advanced technological solutions.

The exchanges will leverage online monitoring to supervise audits, ensuring physical visits by auditors through geo-location tracking. Access to the system will be highly secure, permitting only authorized auditors via an OTP mechanism. This new framework will take effect during the audit period starting FY 2025-26.

Surprise audits and stringent technology measures are central to this initiative, promising thorough evaluation of brokers. Stock exchanges will submit semi-annual summaries to Sebi detailing audits conducted, compliance actions, and audit findings. This approach marks a significant step in risk mitigation and audit transparency in the stock market sector.

(With inputs from agencies.)