The Securities and Exchange Board of India (SEBI) has listed guidelines for market infrastructure institutions to set up an internal audit committee, according to a circular on Monday.
SEBI underlined the new guidelines “in order to further strengthen the governance mechanism at MIIs,” the circular stated.
The markets watchdog said the audit would be on three verticals and must be done by an independent audit firm. The MII policy should have a policy to appoint the audit form with approval from the internal audit committee. The firm will report only to the committee, SEBI added. The terms of reference shall be standardised by the MIIs in consultation with the industries standards forum.
The audit committee shall not have any executive director and the key managerial personnel of the MII shall have a chance to be heard by the audit committee. They can also sit in the meetings with the approval chairperson of the committee but will not have the right to vote, it said.
The provisions of the circular will come into effect on the 90th day from May 19, 2025, the date on which the circular was issued.
Published – May 19, 2025 09:45 pm IST
