SEBI came out with revised guidelines for system audit to be conducted by mutual funds and asset management companies. 

The guidelines come after "considering the importance of system audit in technology driven asset management activity and to enhance and standardise the system audit", the market regulator said in a circular. 

Besides, mutual funds/AMCs have been directed to constitute a technology committee entrusted with the task of reviewing the cybersecurity and cyber-resilience framework for mutual funds and AMCs, SEBI said in a separate circular.

The regulator has asked mutual funds and AMCs to conduct system audit on an annual basis by an eligible independent auditor. 

The audit should include the audit of systems and processes related to fund accounting system for calculation of net asset values, financial accounting and reporting system for AMCs.

Moreover, audit related to unit holder administration and servicing systems for customer service, funds flow process, system processes for meeting regulatory requirements, prudential investment limits and access rights to systems interface shall also be done. 

Further, mutual funds and AMCs are required to submit a report regarding exceptions observed in the system audit to the technology committe for review in the prescribed format. 

The committee after reviewing the report shall place it before the AMC & Trustee Board. The report along with trustee's comments should be communicated to SEBI within six months of the respective financial year, starting from 2019-20. #casansaar (Source - PTI)