Regulation 37 - Inspection - International Financial Services Centres Authority (Capital Market Intermediaries) Regulations, 2025

CHAPTER V INSPECTION 37. Inspection (1) The Authority may suo motu or upon receipt of information or complaint at any time appoint one or more persons as inspecting authority to undertake the inspection of the books, accounts, records, documents, infrastructure, procedures and systems of a CMI, for any purpose, including the purposes as specified under sub-regulation (2). (2) The purposes referred to in sub-regulation (1) may include, - (a) to ensure that the books of account, records and documents are being maintained in the manner as required under these regulations; (b) to ensure that the provisions of the Act, the regulations and circulars made thereunder, are complied with; (c) to ascertain whether adequate internal control systems, procedures and safeguards have been established or are being followed by the CMI to fulfil its obligations under these regulations; (d) to ascertain whether any circumstances exist which would render the intermediary unfit or ineligible; (e) to inquire into the complaints received from the investors, clients, other market participants, or any other person on any matter having a bearing on the activities of the intermediary; and (f) to inquire suo motu into such matters as may be deemed fit in the interest of investors or the capital market in an IFSC. (3) Before undertaking an inspection under sub-regulation (1), the inspecting authority shall give a notice to the CMI: Provided that where the inspecting authority is satisfied that in the interest of the investors no such notice should be given, it may, for reasons to be recorded in writing, dispense with such notice. (4) Notwithstanding anything contained in sub-regulations (1), (2) and (3), a recognised stock exchange, a recognised clearing corporation or a recognised depository may conduct inspection of a broker dealer (trading member), a clearing member or a depository participant respectively, in accordance with its byelaws. (5) The Authority and the relevant market infrastructure institution may conduct joint inspection of a CMI.