Please suggest me check list for poper internal audit of a stock broker (Company).
Sachin Panwar (.) (86 Points)
27 May 2011Please suggest me check list for poper internal audit of a stock broker (Company).
Sachin Panwar
(.)
(86 Points)
Replied 07 June 2011
| Originally posted by : Sachin Panwar | ||
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Please suggest me check list for poper internal audit of a stock broker (Company). |
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Sandeep gupta
(AM)
(27 Points)
Replied 21 June 2011
Maintenance of Books of Accounts / Records / Registers :-
1. Sauda Book (Register of Transactions)
2. Exchange wise client
3. ledgers
4. General ledger
5. Journals
6. Cash Book
7. Bank Pass Book
8. Register of Complaints
9. Bank Book
10. Margin Deposit Book
11. Trade log
12. Order log
13. Evidence of client placing order
14. Register of Commodities
15. Records of Deliveries
16. Received / Tendered
17. Contract wise
18. Records in Respect of
19. Premium / Discount
20. Records in Respect of
21. Brokerage
22. Records in Respect of
23. Service Tax
Dealing with Clients :-
1. Obtained Know Your Client Forms complete in all respect along with supporting documents from all clients before accepting or placing orders on their behalf
2. PAN Details of all clients obtained and uploaded to the Exchange
3. Executed Member Client Agreement as per format prescribed by the Exchange, with all Clients, before accepting or placing orders on their behalf
4. Issued Risk Disclosure
5. Collection of adequate Margin from clients before entering any order for them
6. Allotment of Unique Client Codes to clients
7. Not accepted orders in Inactive Client’s accounts without specific written request from them to reopen those accounts along with all required formalities of KYC
Contract Notes :-
1. Issued Contract Notes to all clients
2. Issued contracts notes within 24 hours of the execution of trades
3. Issue of Contract Notes as per format prescribed by the Exchange and with running serial number initiated at the start of every financial year
4. Maintained evidence of dispatching Contract Notes
5. Maintained duplicate Copy of Contract Notes
6. Complied with requirements related to issue of Digital Contract Notes
7. Modification of client codes, if any, was done on the trading system only and no modification of client codes has been done beyond the stipulated time period
Brokerage :-
1. Brokerage has been charged separately and same has been mentioned separately from the price on the Contract Notes
2. Brokerage has been Charged within Permissible Limit
3. Not shared brokerage with another member/employee of another member/person for or with whom members are forbidden to do business/ /or unregistered intermediaries
Handling Funds :-
1. Maintaining Separate Client and Own Bank accounts
2. Segregation of Client’s and Own Funds
3. Not mis utilized Clients’ Funds/ Commodities
4. Not involved in cash transactions with clients
5. Full Pay-out of Funds has been made to all clients within 48 hours of receiving relevant payout from the Exchange
6. Maintained evidence of making payments to clients for Mark to Market gains
7. Statement of Accounts for funds (with error reporting clause) has been sent to all clients, with periodicity not exceeding 3 months
Trading :-
1. Use of Trading Terminals by Approved Users only
2. Not used any software facilitating matching/grouping of orders between clients
3. All orders were routed to the trading system of the Exchange for matching
4. Periodic System Audit of CTCL and IBT conducted
5. All trades in own account were done in PRO code only and such trades were done in approved locations only
6. Traded only through approved work station(s) from approved location(s)
Membership Requirements :-
1. No change in Shareholding Pattern or Sharing Pattern /Director or Partner/Name/Dominant Promoter Group without approval of the Exchange
2. Maintained Net-Worth as per Exchange requirement
3. Appointment of Compliance Officer
4. Submitted Annual Compliance Report – FY: 2008-09
5. Submitted Annual Returns – FY: 2008-09
Others :-
1. Not Issued Advertisement without prior approval from the Exchange
2. Not used MCX Logo/Emblem
3. Not doing business with / for trading member who are prohibited to transact including suspended/expelled/default er trading member, defaulting constituents and employees of other trading member
4. Not indulged in Portfolio Advisory Services/ Portfolio Management Services
5. Complied with Anti Money Laundering and Know Your Customer( KYC) Norms
6. Maintained Investor’s Grievances records and no complaints were pending for more than 30 days
7. Complied with requirements related to dealings through Sub-Brokers
8. Not indulged in Circular Trading, Cross Dealing, Price Rigging, Price Manipulation and Any other Market Abuses
9. Not Dealing with Debarred/ Suspended/Defaulter Members
10. No Offices/Branches/Franchis es or User ID’s/ Trade Work Stations (TWS) or Trading Terminal are being used for doing illegal trading or any trade outside the purview of the Exchange
11. Display of Notice Board as per Exchange requirement
12. MCCP Certification obtained by at least one of the employees
13. Stamp Duty paid
14. Services Tax/ Sales Tax/ VAT paid
15. Complied with all requirements pertaining to delivery / receipt of commodities
trupti
(accounting intern)
(23 Points)
Replied 26 September 2012
Hi,
I need information about how stock broking firm does its own accounitng. How do they record transactions in in the books they maintained specially cleint ledger and general ledger.
Regards
Trupti Moghe
Live class on PF & ESI Enrollment & Returns Filing(with recording)
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