Audit season starts as soon as a financial year gets over. And is it no different for SEBI registered Investment Advisers (RIAs).
As per SEBI (Investment Advisers) Regulations, 2013, all investment advisers have to get a yearly audit done in respect of compliance with the regulations from a Chartered Accountant or a Company Secretary in practice.
As a Company Secretary in practice, I am eligible to conduct the compliance audit for you and give you an audit report which you can share with SEBI / BASL.
Click here to know the process I follow to conduct this audit.
Here are a few common questions asked by RIAs:
#1 – Is the annual compliance audit mandatory for individual RIAs too?
A: Yes, compliance audit is mandatory for all investment advisers, whether they are individuals or partnership firms or companies or LLPs.
#2 – When should I get the audit done?
A: The audit should be completed within 6 months from the end of the financial year.
However, I suggest, the earlier the better. Reason being that if there are any gaps in the process, they can be filled as soon as possible and not wait till completion of half a year.
#3 – Do I need to submit the report to SEBI?
A: Yes. Post completion of compliance audit, IAs must report the adverse findings, if any, along with action taken thereof to BASL (compliance.ria@bseasl.com) within a period of one month from the date of the compliance audit report but not later than October 31st of each year for the previous financial year.
Investment advisers who are also providing distribution services, should get the certificate from an auditor confirming compliance with the client level segregation requirements. This certificate will form part of the compliance audit.
#4 – What if I have missed doing an audit for the previous year?
A: I would recommend, you get the audit done for the previous year rather than being non-compliant. The previous year’s report also has to be submitted to BASL.
#5 – What are the documents required for the audit?
A: Click here to get a broad list for documents / information required for audit. Once we get on with the arrangement, I will share a detailed email on the requirements for audit.
Remember, the cost of non-compliance is much higher than the cost of compliance.
So, are you set to get the compliance audit done for you?
For more information and queries, you can write to me at kruti@cskruti.com
Is there any specific format to be given for auditor certificate to be submitted even if there are no client and no transactions
There is no format specified by SEBI.
Hi Kruthi, Is it Mandatory to have Audit in case of Zero Client for the Investment Advisors.
Hi Lokesh, there is no specification in the IA regulations about the same. I suggest to get the audit done even if there are zero clients for better compliance of the regulations.
What are the charges I am individual RA. krithi please get in touch
Hi Raju, when did you get registered with SEBI and how many clients do you have as on March 31, 2021. Kindly share your response on email at kruti@cskruti.com
RA need to have compliance officer appointed with them or only they need audit report every year?
If the RA is a company / LLP, then the RA needs to have an in-house compliance officer appointed.
All RAs need to get compliance audit conducted every year.
Thanks a lot for reply.