Description

BSE extends deadlines for submission of System Audit reports for trading members using algorithmic trading facilities for the half-yearly period ending September 30, 2025.

Summary

BSE has extended the timelines for submission of System Audit reports (Type-III) for trading members who use algorithmic trading or provide algorithmic trading facilities to clients. This extension applies to the half-yearly audit period from April 2025 to September 2025 and was granted following representations from market participants in consultation with SEBI.

Key Points

  • Extension applies to stockbrokers using algorithmic trading or providing algorithmic trading facilities
  • Covers half-yearly audit period: April 2025 - September 2025
  • Extension granted after consultation between Exchanges and SEBI
  • Applies to all eligible members including Qualified Stock Brokers (QSBs)
  • Three separate deadlines extended: Audit Plan submission, Preliminary Audit Report, and Action Taken Report

Regulatory Changes

This circular modifies the timelines originally specified in Exchange notice no. 20251017-29 dated October 17, 2025. The extension does not change the fundamental requirement for system audits but provides additional time for compliance.

Compliance Requirements

Trading members using algorithmic trading must:

  1. Complete System Auditor Appointment & Submit Audit Plan - by December 10, 2025
  2. Submit Preliminary Audit Report - by December 31, 2025
  3. Submit Action Taken Report (ATR) - by March 31, 2026 (if applicable)

These requirements apply to the half-yearly period from April 2025 to September 2025.

Important Dates

  • December 10, 2025: Deadline for completion of System Auditor Appointment and submission of Audit Plan
  • December 31, 2025: Deadline for submission of Preliminary Audit Report
  • March 31, 2026: Deadline for submission of Action Taken Report (if applicable)
  • Audit Period Covered: April 2025 - September 2025

Impact Assessment

Affected Entities: Trading members who use algorithmic trading or provide algorithmic trading facilities to clients, including Qualified Stock Brokers (QSBs).

Operational Impact: Medium - The extension provides relief to trading members by allowing additional time to complete system audits and submit required reports. This reduces immediate compliance pressure while maintaining audit requirements.

Market Impact: Low - This is an administrative extension that does not affect trading operations or market structure. It demonstrates regulatory flexibility in response to industry feedback while maintaining oversight of algorithmic trading systems.

Impact Justification

Administrative extension affecting trading members using algorithmic trading; provides additional time for compliance but does not change underlying regulatory requirements