Currency Derivatives Segment
Inspection Department

Circular No. MCX-SX/INSP/IAR-1112(1)/651/2011

October 31, 2011

Sub: Internal Audit for Trading Members / Clearing Members for the period April 1, 2011 to September 30, 2011
In terms of the provisions of Rules, Bye-Laws and Regulations of the MCX Stock Exchange Ltd. (Exchange), the Members are notified as under:

SEBI has stipulated the requirement of carrying out internal audit on a half yearly basis by the trading members / clearing members, by Chartered Accountants, Company Secretaries or Cost and Management Accountants who are in practice and who do not have any conflict of interest, vide Circular No. SEBI/MIRSD/Master Cir-04/2010 dated March 17, 2010 forwarded by the Exchange vide Circular No. MCX-SX/INSP/322/2010 dated March 23, 2010.

The internal audit for the period April 1, 2011 to September 30, 2011 is due. Members are required to submit the same latest by December 31, 2011 and adhere to the following:
  1. The Auditor’s Certificate and the Audit Report shall be in the formats given in Annexure 1 & 2 respectively.
  2. The Auditors shall have regard to Guidelines given in Annexure 3 while preparing the Report and shall include the additional matters specified therein, to the extent applicable. Annexure 3 also contains guidelines for conduct of Internal Audit along with various regulatory references.
  3. Members may note that the present format in Annexure 1 & 2 contain certain revised requirements from earlier circulars. Members are advised to take note of the same and furnish the Report / Certificate prepared as per the revised requirements for the period April 1, 2011 to September 30, 2011.
  4. Each page of the Audit Report should be stamped by the auditors.
  5. The Audit certificate should be on the letterhead of the auditors containing the address and contact details of the auditors.
  6. Minimum sample size should be adhered to and mentioned in the audit report.
  7. The Audit Report must contain Management comments.
  8. The Audit Reports should be forwarded only by the Members of the Exchange.
  9. The Audit Report should contain observations pertaining to the membership of MCX-SX only.
Appropriate action shall be initiated if non-compliances/ violations are reported by the Internal Auditors, along with the management acceptance of the auditor findings. Attention of the members is drawn to our circular no. MCX-SX/INSP/562/2011 dated May 3, 2011 which is applicable for the half year ending on 31st March 2011 and onwards.

Members are further informed that, a penalty @ of Rs 100/- per day shall be levied in case of submission of internal audit reports for the period January 1, 2012 to March 31, 2012. For delay beyond March 31, 2012 till June 30, 2012, a penalty @ of Rs. 500/- per day shall be levied. In case of non submission of internal Audit Report beyond June 30, 2012 / submission of incomplete /inadequate/deficient internal audit report, the matter shall be placed before the relevant authority for suitable action.

All the members are advised to ensure compliance with the above requirements and submit the internal audit report positively by December 31, 2011 to:

Inspection Department
MCX Stock Exchange Limited
2nd Floor, Exchange Square
Suren Road, Andheri (East)
Mumbai – 400 093.
 

Vandana D. Vania
Sr. Manager
 
Enclosures:
 
In case of any query, members may contact the compliance team on 022-6731 9088 or on: compliancemsx@mcx-sx.com
 
 
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MCX Stock Exchange Limited
2nd Floor, Exchange Square, Suren Road, Chakala, Andheri (East), Mumbai - 400 093
Tel.: 022 – 6731 9000 , Fax: 022 - 6726 9575
Website: www.mcx-sx.com