The Indian Clearing Corporation Limited (ICCL) has issued a notice requiring all Professional Clearing Members (PCMs) who conducted clearing activities during FY 2025-26 to complete and submit a System Audit Report. This is pursuant to SEBI Circular No. SEBI/HO/MRD/TPD/P/CIR/2024/84 dated June 20, 2024 on System Audit of PCMs.

Key Points

• All PCMs who conducted clearing activities during the audit period must submit a System Audit Report for FY 2025-26
• The audit report must be completed by May 31, 2026
• Submission to ICCL must be made by June 30, 2026
• Reports must be approved by the Governing Board (or equivalent governance structure) before submission
• Submissions are to be sent to iccl.systemaudit@icclindia.com
• Subject line format: “System Audit Report- Name of the Member (Member Code) – FY 2025-26”

Regulatory Changes

No new regulatory changes introduced. This notice operationalizes the existing SEBI Circular No. SEBI/HO/MRD/TPD/P/CIR/2024/84 dated June 20, 2024, which established the System Audit framework for Professional Clearing Members.

Compliance Requirements

• PCMs must conduct a System Audit covering their clearing activities for FY 2025-26
• The audit report requires approval from the Governing Board or equivalent governance body prior to submission
• Reports must be emailed to iccl.systemaudit@icclindia.com with the prescribed subject line
• Non-compliance actions are detailed in the attached Annexure 2

Important Dates

Impact Assessment

This circular has a targeted operational impact on Professional Clearing Members (PCMs) only. PCMs must allocate resources for conducting and reviewing the system audit within the prescribed timeline. Non-compliant PCMs face regulatory action as outlined in Annexure 2. There is no direct impact on trading activity, listed securities, or retail investors.

NSE’s Compliance department has issued circular NCL/CMPL/73876 (Circular No. 14/2026) dated April 23, 2026, pertaining to the system audit of Professional Clearing Members (PCMs). The circular outlines the audit framework and compliance obligations that PCMs must fulfill with respect to their operational and IT systems.

Key Points

• Circular issued by NSE Compliance department under reference NCL/CMPL/73876
• Applicable to all Professional Clearing Members (PCMs) registered with NSE
• System audit is a mandatory regulatory requirement for PCMs to ensure operational integrity
• Audits cover IT infrastructure, risk management systems, and clearing/settlement processes
• PCMs must engage empanelled auditors as per exchange guidelines

Regulatory Changes

This circular reinforces and/or updates the existing framework for system audits applicable to Professional Clearing Members. PCMs are entities authorized to clear and settle trades on behalf of other trading members, and are subject to periodic system audits to ensure their technology and operational systems meet exchange and regulatory standards.

Compliance Requirements

• All Professional Clearing Members must conduct system audits as prescribed by NSE
• Audits must be carried out by CERT-In empanelled auditors or other auditors approved by the exchange
• Audit reports must be submitted to NSE within the stipulated timelines
• Any deficiencies identified during the audit must be rectified and compliance confirmed to the exchange
• PCMs must maintain documentation and records as required for audit purposes

Important Dates

• Circular Date: April 23, 2026
• Specific audit deadlines and submission timelines are detailed in the full circular (refer to PDF for precise dates)

Impact Assessment

This circular has a moderate operational impact on Professional Clearing Members, who will need to schedule and complete system audits in compliance with NSE requirements. The audit process involves engagement of approved auditors, IT system reviews, and submission of reports to the exchange. Non-compliance may attract regulatory action. The broader market impact is limited as this is directed at a specific category of clearing intermediaries rather than trading members or investors at large.