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In a significant move to enhance the integrity and efficiency of the financial markets, the Securities and Exchange Board of India (Sebi) announced on Thursday a comprehensive framework for the system audit of Professional Clearing Members (PCMs). This directive mandates PCMs to report both major and minor non-compliances identified during such audits, marking a pivotal step towards bolstering compliance and technological robustness within the sector.
The newly introduced framework is set to be implemented with immediate effect, with the inaugural audit scheduled for the fiscal year 2024. This initiative is part of Sebi's ongoing efforts to ensure that the market infrastructure remains robust, transparent, and in compliance with regulatory standards.
As part of this framework, all clearing corporations (CCs) are required to collaboratively devise a uniform penalty structure. This structure aims at ensuring the timely submission of system audit reports by PCMs and the prompt closure of any audit observations. This move is expected to streamline the audit process and enforce accountability among PCMs.
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