Checklist for Internal Audit of Stock Brokers

Checklist For Internal Audit Of Stock Brokers – BSE, NSE, and MCX-SX
1 Appointment Letter of Internal Auditor for Internal Audit of all Segments.
2 Trial Balance as on 31.03.2012, Duly signed by Compliance Officer.
3 Cash-Book alongwith Cash-in-hand Certificate as on 31.03.2012.
4 Copy of Membership Certificate of MCX-SX alongwith SEBI Registration Certificate.
5 Sample KYC to check whether all disclosure requirements for opening of client accounts has been               adhered to and that proper documents according to the nature of clients(Individual, HUF,Corporate or         firm) have been collected

6 List of the Terminals granted by the Member, their Locations and Authorized Persons.
7 Copy of appointment letter of Compliance Officer.
8 List of Sub-Brokers along with copy of Registration with SEBI/Stock Exchange as well as copy of               agreement with Sub-Brokers defining the Scope of Authority.
9 Details of Branch Office and In-Charge/Branch Head.
10 Permission from MCX-SX for using internet based trading(IBT) software
11 Name of the software used along with vendor detail. Soft copy of Software manual used and list of               basic Reports that can be generated from the software.
12 Statement Of Net Worth.
13 Details Of Authorised Signatories 
14 Copy of Digital Signature of Electronic Contract Note(ECN), if any.
15 Copy Of Organisation Chart.
16 List of all Employees along with Designation.
17 Copy of Annual Compliance/Status Report submitted to Exchange.
18 Details of Clients, along with unique client code that have opened account w.e.f. 01 October, 2011 till           31 March, 2012.
19 Confirmation as to no Clients are assigned More than one UCC’s and also that and not more than one           client is assigned a same UCC
20 Details of Investor Complaints Received, Resolved and Pending for the period ending 31 March, 2012.
21 Email ID Solely for the purpose of investor grievances and information of the same on all customer                 documents like KYC’s, contract notes for Investor Awareness.
22 Previous Audit Reports and Compliances / Comments of Previous Inspections.
23 Report showing daily exposure of clients in Derivative Segment along with
        details of Margin Collected and system of daily reporting the correct client
         margin collection to NSCCL.
24 Details of Payin and Payout Settlement alongwith Pool and Beneficiary Account maintained with the               Depository Participant.
25 Counterfoils/Duplicates of Contract Notes(Properly Numbered) issued to Clients
26 Power of Attorney or Board Resolution Authorizing Directors/Employees for Signing of Contract                 Notes .
27 Details of Bank Accounts, with Hard copy of Bank Statement as on 31st March 2012 along with Bank         Reconciliation Statement.
28 Copy of letter of intimation of principal officer to Financial Intelligence Unit-India(FIU-IND)
29 Detail of Locations of Pro-Trading.
30 Month wise details as total Brokerage Received/ Service Tax/Stamp Duty paid.
31 List of all Penalties imposed by the Exchange for the year ended 31.03.2012 in the following format –
                      S No. date Particular and Reason for Penalty Amount Remarks
32 Copy of Indemnity(Insurance) Policy of Stock Broker.
33 Details of CTCL connections provided during the year along with copy of permission from SEBI.
34 Copy of System audit report.
35 Details of transfer of any trade, (date wise) from one client code to another client
        code or from client code to pro or vice versa in the back office.However, It is Not Allowed as per                Regulations
36 Detail of Client wise Turnover/STT-/Margin/Exposure in excel sheet.
37 Copy of Risk management policy.
38 Details of Debt Outstanding for More than 30 days
39 List of Inactive accounts.

1 Comment

Leave a Reply

Your email address will not be published. Required fields are marked *