Description

NSE requires clearing members to submit internal audit reports for the half year ended September 30, 2025, along with operational guidelines for auditor registration and report submission through the NCL Member Portal.

Summary

NSE has issued operational guidelines for clearing members and Professional Clearing Members (PCM) to submit their half-yearly internal audit reports for the period ending September 30, 2025. The circular provides detailed instructions for creating sub-users, registering internal auditors, and submitting reports through the NCL Member Portal at https://ims.connect2nsccl.com/NCLMemberPortal/. Members must register their internal auditors for each audit cycle, irrespective of whether the auditor was previously registered.

Key Points

  • Members must create sub-users with NCL_INSPECTION role for internal audit submission
  • Internal auditors must be registered separately for each audit cycle
  • Auditor registration requires submission of undertaking and complete auditor details
  • Upon registration, auditors receive login credentials via email
  • Members must create auditor sub-users with NCL_INSPECTION-INTERNAL AUDIT role
  • All fields in auditor registration are mandatory except ‘Expiry Date of COP’
  • Edit facility available only if report not yet submitted by auditor
  • Members must obtain ‘Conflict of Interest’ declaration from auditors
  • Reports cover CM, FO, CD, and COM segments as applicable

Regulatory Changes

No new regulatory changes introduced. This circular provides operational guidelines and manual for the existing requirement of half-yearly internal audit report submission by clearing members.

Compliance Requirements

For Clearing Members/PCM:

  • Login to NCL Member Portal using Admin ID
  • Create sub-user with NCL_INSPECTION role
  • Register internal auditors through the portal for the current audit cycle
  • Provide accurate auditor details including email ID for credential delivery
  • Create auditor sub-user account with same credentials as auditor registration
  • Obtain and submit Conflict of Interest declaration from auditors
  • Submit Annexure I, II, and V through registered auditors

For Internal Auditors:

  • Receive login credentials via registered email
  • Change password upon first login
  • Conduct internal audit for April 2025 to September 2025 period
  • Submit required annexures (I, II, and V) through the portal
  • Cover all applicable segments: CM, FO, CD, COM

Important Dates

  • Audit Period: April 1, 2025 to September 30, 2025
  • Circular Date: October 7, 2025
  • Specific submission deadline not mentioned in the provided content

Impact Assessment

Operational Impact: Clearing members must allocate resources for the audit process and ensure timely completion of auditor registration and report submission. The requirement for fresh auditor registration each cycle adds administrative steps.

Compliance Impact: High - This is a mandatory regulatory requirement for all clearing members. Non-compliance could result in regulatory action. The detailed procedural requirements necessitate careful attention to portal navigation and documentation submission.

Market Impact: Indirect - While this is primarily a compliance requirement, proper internal audits enhance the overall integrity and risk management framework of the clearing ecosystem, contributing to market stability and investor protection.

Impact Justification

Mandatory compliance requirement for all clearing members with specific procedural guidelines and submission deadlines for internal audit reports