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Securities and Exchange Board of India (SEBI) 19

AUDIT OF MUTUAL FUNDS

The auditor of a Mutual Funds, appointed in terms of Regulation
55(1) of SEBI (MFs) Regulations shall be a firm, including a
limited liability firm, constituted under the LLP Act, 2008. With
respect to appointment of auditors in terms of Regulation 55(1)
of SEBI (MFs) Regulation, 1996, it has been decided that:
No MF shall appoint an auditor for more than 2 terms of
maximum five consecutive years. Such auditor may be re-
appointed after cooling off period of 5 years.
Further, during the cooling-off period of five years, the incoming
auditor may not include:
 Any firm that has common partner(s) with the outgoing
audit firm
 Any associate/affiliate firm(s) of the outgoing audit firm
which are under the same network of audit firms wherein
the term “same network” includes the firms operating or
functioning, hitherto or in future, under the same brand
name, trade name or common control
Existing auditors may be appointed for a maximum of 10
years (including all preceding years for which an auditor
has been appointed in terms of Regulation 55(1) of SEBI
(Mutual Funds) Regulation, 1996). In this respect, the
following may be noted:

 Auditors who have conducted audit of the Mutual Fund
for less than 9 years (as on date of issuance of this
circular) may continue for the residual period of service.
 Auditors who have conducted audit of the Mutual Fund
for 9 years or more (as on date of issuance of this
circular) may continue for a maximum of 1 year from
date of issuance of this circular.
Securities and  Such auditors shall subsequently be eligible for re-

Exchange Board appointment after a cooling-off period of 5 years, in
terms of Para B(2)(i) and Para B(2)(ii) above.

of India (SEBI) This circular is issued in exercise of powers conferred under
Section 11(1) of the Securities and Exchange Board of India
Act, 1992, read with the provisions of Regulation 77 of SEBI
(Mutual Funds) Regulations, 1996, to protect the interests of
investors in securities and to promote the development of, and
to regulate the securities market.

LIMITED REVIEW UNDER CLAUSE 41 OF THE
LISTING AGREEMENT OF SECURITIES AND
EXCHANGE BOARD OF INDIA

The Securities and Exchange Board of India earlier required for
a half-yearly review of accounts for listed companies to ensure
better compliance and transparency. Effective from the quarter

Quick Insights on Professional Opportunities for Chartered Accountants 59