Regulation 18H - Escalation and reporting mechanisms - Securities and Exchange Board of India (Stock Brokers) Regulations, 1992

1 [Escalation and reporting mechanisms. 18H. (1) The Audit Committee or the Board of Directors or persons of other equivalent or analogous rank of the stock broker, shall review the compliance with the provisions of the framework under this Chapter of these regulations not less than once in a quarter and shall verify the adequacy and efficiency of the systems for internal control and reporting by analysing the relevant data. (2) The stock broker shall on the detection of any suspicious activity, inform the same along with the details to the stock exchanges, as soon as reasonably possible, but in any case not later than forty eight hours from such detection, in such manner as may be specified by the Board or the stock exchanges from time to time. (3) The stock broker shall submit a summary analysis and action taken report on instances of suspicious activity, fraud and market abuse or a nil report where no such instances were detected, on a half-yearly basis to the stock exchanges. (4) Any deviation in adherence to internal controls, risk management policy, surveillance policy, policy for onboarding of clients along with the proposed corrective actions for such deviation shall be placed before the appropriate Committee, Board of Directors or such other equivalent or analogous bodies of the stock broker at regular intervals and such deviations shall also form a part of the report to be submitted by the stock broker to the stock exchanges in terms of sub-regulation (3) of this regulation. (5) The stock broker shall obtain guidance from the stock exchanges on any suspicious activity which were identified by it, but the violation of the provisions of any applicable law in respect of such activity could not be ascertained due to the limited information available with the stock broker. ] ***************** NOTES:- 1. Inserted vide Notification No. SEBI/LAD-NRO/GN/2024/186 dated 27-06-2024