SEBI issues Audit framework for Mutual Funds or Asset Management Companies

Apr 12, 2019 | by Avantis RegTech Legal Research Team


The Securities Exchange Board of India (SEBI) on April 11, 2019 issues system audit framework for mutual funds or Asset Management Companies (AMCs). SEBI considering the importance of systems audit in asset management activity, the revised guidelines are placed at Annexure 1(Page 3). On the date of issuance of this Circular, SEBI Circular SEBI/IMD/CIR No.9/176988/2009 dated September 16, 2019 shall stand rescinded.

The guidelines are:

•The aforementioned audit should be encompassing audit systems and processes, related to examination of integration of front office system with the back office system, fund  accounting  system for calculation of net asset values, financial accounting and reporting system for the  AMC,  Unit-holder administration  and servicing systems for customer service, funds flow process, system processes for meeting  regulatory  requirements,  prudential  investment limits and access rights to systems interface.

•Mutual Funds / AMCs are advised to conduct systems audit on an annual basis by an independent CISA / CISM qualified or equivalent auditor to check compliance of the provisions of this circular. 

•Mutual Funds / AMCs are further advised to take necessary steps to put in place systems for implementation of this circular. The exception report as per Annexure 2 should be placed before the Technology Committee for review. The Technology Committee after review shall place the same before the AMC & Trustee Board.

[Circular No. SEBI/HO/IMD/DF2/CIR/P/2019/57]

Click here to download the Circular.

 


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