The Securities and Exchange Board of India (“SEBI”), vide its circular bearing no. SEBI/HO/IMD/IMD-I/DOF1/P/CIR/2021/632 dated September 30, 2021, has provided for extension of timelines for investment advisers (“IAs”) to conduct annual audit in respect of compliance with the SEBI (Investment Advisers) Regulations, 2013 (“IA Regulations”) and circulars issued thereunder.
Previously, through its circular bearing no. SEBI/HO/IMD/DF1/CIR/P/2020/182 dated September 23, 2020, the SEBI had prescribed that IAs may conduct annual audit prescribed under the IA Regulations and circulars issued thereunder, within a period of 6 (six) months from the end of a financial year. Furthermore, SEBI provided that adverse findings of the audit, if any, may be submitted within 1 (one) month from the date of the audit, and not later than October 31 of each year for the previous financial year, starting from the financial year ending March 31, 2021.
SEBI had also prescribed that IAs may obtain an annual certificate from an auditor within a period of 6 (six) months from the end of a financial year, confirming IAs’ compliance with client level segregation requirements as provided for in the Regulation 22 of the IA Regulations.
Upon representations from IAs proposing extension of the timelines as previously prescribed by SEBI for annual audit and certificate, the SEBI extended the timelines for the financial year ending March 31, 2021 by 3 (three) months, thereby modifying the circular dated September 23, 2020 as follows:
Save for the abovementioned provisions, the rest of the circular remains unchanged.
Please find a copy of the circular bearing no. SEBI/HO/IMD/IMD-I/DOF1/P/CIR/2021/632 dated September 30, 2021, here; circular bearing no. SEBI/HO/IMD/DF1/CIR/P/2020/182 dated September 23, 2020, here; the IA Regulations, here.
This update has been contributed by Gaurav Singhi (Partner) and Aryan Mohindroo (Associate).
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