The National Stock Exchange (NSE) on October 19, 2023, issued a notification regarding System Audit of Trading Members (TYPE-III).
in relation to systems audit requirement, trading members using algorithm software (Type III) are required to conduct a system audit for the period April 01, 2023, to September 30, 2023, for all NNF trading software across the segments and submit the report to the Exchange as per the following timelines.
The link for submission of the System Audit Report will be made available from October 23, 2023. All Trading members are requested to take note that, for each non-compliance reported by the auditor, trading members are required to submit a corrective action taken report as per the above-mentioned timelines. On review of details of corrective action submitted by the trading member, the auditor shall submit the status of compliance as Compliant or Non-Compliant on ENIT.
The process for submitting the details of corrective action taken by the trading member through ATR and the auditor’s confirmation on the compliance status of ATR shall be provided through a separate circular. Further, based on audit findings and related risks, the auditor should indicate if a follow-on audit is required to review the status of NCs (Non-Compliances).
To ensure timely corrective actions are taken by the Trading members, a follow-on audit, if any, shall be scheduled by the trading member as per the above-mentioned timelines. Submission of the system audit report shall be considered complete only after the trading member submits the report to the Exchange after providing management comments. Further, the auditor must provide compliance status for each TOR item as Compliant/Non-Compliant/Not Applicable, and in case of any TOR item that is not applicable, the auditor is required to provide justification for the non-applicability of said TOR.
[Notification No. NSE/INSP/58999]
