Executive Summary:
This SEBI circular addresses investor grievance redressal mechanisms, mandating Recognized Stock Exchanges and Depositories to implement an online web-based complaint redressal system within 6 months. It also permits hybrid (online and offline) modes for conducting Grievance Redressal Committee (GRC) meetings and arbitration processes. Furthermore, it amends a previous circular, exempting clients with claims/counterclaims up to Rs. 20 lakh from arbitration fees.
Key Points / Main Content:
Online Web Based Complaints Redressal System:
* Recognized Stock Exchanges and Depositories must design and implement their own online web-based complaints redressal systems.
* The system should facilitate investors in filing, escalating, and tracking complaints through GRC, arbitration, and appellate arbitration.
* The deadline for implementation is within 6 months from the issuance of this circular (July 04, 2022).
* The system aims to expedite complaint redressal, eliminate physical movement of complaints, and provide easy retrieval and tracking.
* Exchanges and Depositories must widely publicize the online system.
* The system should be web-enabled, accessible 24x7, and have the salient features as per the annexure
Hybrid Mode for GRC and Arbitration:
* Stock Exchanges and Depositories shall continue to use a hybrid mode (online and offline) for conducting GRC and arbitration/appellate arbitration processes.
Amendment to SEBI Circular No. SEBI/HO/DDMSC/CIR/P/2017/15:
* Clause 1.J.iii of the specified circular is amended.
* Clients with claims/counterclaims up to Rs. 20 lakh filing arbitration references are exempted from specified fees.
Directives to Recognized Stock Exchanges and Depositories:
* Make necessary amendments to byelaws, rules, and regulations for implementing the decisions.
* Inform members/DPs about the circular's provisions and disseminate the information through their websites.
* Take steps to make investors aware of the changes/modifications.
Impact Analysis:
Recognized Stock Exchanges including Commodity Derivatives Exchanges:
* Impact: Required to design, implement, and publicize online complaint redressal systems, continue hybrid GRC/arbitration modes, amend byelaws, and inform members/investors of changes.
* Action Required: Design and implement the online system within 6 months, amend relevant regulations, notify members/DPs/investors.
Depositories:
* Impact: Required to design, implement, and publicize online complaint redressal systems, adopt hybrid GRC/arbitration modes, amend byelaws, and inform members/investors of changes.
* Action Required: Design and implement the online system within 6 months, adopt hybrid GRC/arbitration modes, amend relevant regulations, notify members/DPs/investors.
Members/Depository Participants:
* Impact: Need to be aware of the new online complaint redressal system and the changes in arbitration fee rules.
* Action Required: Understand and adapt to the new processes for handling investor grievances.
Investors:
* Impact: Benefit from an easier and faster online complaint redressal system and potential exemption from arbitration fees for claims up to Rs. 20 lakh.
* Action Required: Utilize the online system for lodging and tracking complaints.
Key Entities Referenced
Securities and Exchange Board of India (SEBI): The regulatory body for securities markets in India, responsible for protecting investor interests and regulating the securities market.
Investor Grievance Redressal Mechanism: A system for addressing and resolving complaints from investors in the securities market.
SCORES: An online platform implemented by SEBI to help investors lodge complaints against listed companies and SEBI-registered intermediaries.
Grievance Redressal Committee (GRC): A committee established to resolve investor grievances, as part of the overall redressal mechanism.
Arbitration Mechanism: A process for resolving disputes between investors and market participants through arbitration.
Securities and Exchange Board of India Act 1992: The legislation that established the Securities and Exchange Board of India and defines its powers and functions.
Securities Contracts Regulation Act, 1956: An act to prevent undesirable transactions in securities by regulating the business of dealing in securities
Commodity Derivatives Exchanges: Stock exchanges which deal with commodity derivatives
भारतीय प्रततभूतत और तितिमय बोर्ड
Securities and Exchange Board of India
CIRCULAR
SEBI/HO/MRD1/ICC1/CIR/P/2022/94 July 04, 2022
All Recognized Stock Exchanges including Commodity Derivatives Exchanges /
Depositories
Dear Madam / Sir,
Subject: Investor Grievance Redressal Mechanism and Amendment to SEBI
Circular no. SEBI/HO/DMS/CIR/P/2017/15 dated February 23, 2017
1. Reference may be made to SEBI Circulars no. CIR/MRD/DSA/24/2010 dated
August 11, 2010 on Arbitration Mechanism in Stock Exchanges, no.
CIR/MRD/ICC/30/2013 dated September 26, 2013 on Investor Grievance
Redressal Mechanism and no. SEBI/HO/DMS/CIR/P/2017/15 dated February 23,
2017 on amendments pursuant to comprehensive review of Investor Grievance
Redressal Mechanism.
Online Web Based Complaints Redressal System:
2. SEBI has implemented an online platform (SCORES) designed to help investors to
lodge their complaints, pertaining to securities market, against listed companies
and SEBI registered intermediaries.
3. In line with the same, to enable investors to lodge and follow up their complaints
and track the status of redressal of such complaints from anywhere, all Recognized
Stock Exchanges including Commodity Derivatives Exchanges / Depositories are
advised to design and implement an online web based complaints redressal system
of their own, which will facilitate investors to file complaints and escalate complaints
for redressal through Grievance Redressal Committee (GRC), arbitration, appellate
arbitration etc. in accordance with their respective byelaws, rules and regulations.
The above redressal mechanism shall be implemented within 6 months from the
issuance of this circular. The salient features of the system are enclosed as
Annexure.
4. The system is intended to expedite redressal / disposal of investors’ complaints as
it would also obviate the need for physical movement of complaints. Further, the
Page 1 of 4possibility of loss, damage or misdirection of the physical complaints would be
avoided. It would also facilitate easy retrieval and tracking of complaints at any time.
5. All Recognized Stock Exchanges including Commodity Derivatives Exchanges /
Depositories are advised to widely publicise (including in media) its online web
based complaints redressal system.
Hybrid Mode of Conducting GRC and Arbitration / Appellate Arbitration:
6. During the COVID pandemic, Stock Exchanges were advised to conduct GRC and
arbitration / appellate arbitration meetings/hearings online for faster redressal of
complaints. The online process of GRC and arbitration / appellate arbitration saves
time and cost of the parties involved which is in the interest of investors.
7. Therefore, it has been decided that the Stock Exchanges shall continue with the
hybrid mode (i.e., online and offline) of conducting GRC and arbitration / appellate
arbitration process. The Depositories shall follow the hybrid mode (i.e. online and
offline) of conducting GRC and arbitration / appellate arbitration process.
Amendment to SEBI Circular no. SEBI/HO/DMS/CIR/P/2017/15 dated February 23,
2017:
8. Clause 1.J.(iii) of the SEBI circular no. SEBI/HO/DMS/CIR/P/2017/15 dated
February 23, 2017 stands replaced as under:
1.J. Speeding up grievance redressal mechanism
“(iii) A client, who has a claim / counter claim upto Rs.20 lakh (Rs. Twenty lakh) and
files arbitration reference, will be exempted from payment of the fees specified in
Clause 1.J.(i).”
9. All Recognized Stock Exchanges including Commodity Derivatives Exchanges /
Depositories are directed to:
a) make necessary amendments to the relevant bye-laws, rules and regulations
for the implementation of the above decision immediately;
b) bring the provisions of this circular to the notice of the members/ DPs and also
to disseminate the same through their website; and
c) take steps to make the investors aware of the aforesaid changes/ modifications.
10. This Circular is issued in exercise of the powers conferred under Section 11 (1) of
the Securities and Exchange Board of India Act 1992, read with Section 9(2)(n) and
Section 10 of the Securities Contracts (Regulation) Act, 1956 to protect the interests
of investors in securities and to promote the development of, and to regulate the
securities market and shall come into effect immediately. All other provisions of the
relevant circulars will continue to be in force.
Page 2 of 411. This circular is available on SEBI website at www.sebi.gov.in.
Yours faithfully,
Nirdosh Rajan Minz
Deputy General Manager
Email: nirdoshrm@sebi.gov.in
.
Page 3 of 4ANNEXURE
1. The system should be web enabled and provide online access 24 x 7 with the
following salient features:
Complaints/GRC/Arbitration/Appellate Arbitration and reminders thereon are
lodged online at anytime from anywhere;
An email is generated instantaneously acknowledging the receipt of the complaint
and allotting a unique registration number for future reference and tracking;
The matter/case moves online to the entity (intermediary or listed company)
concerned for its redressal;
The entity concerned can indicate the mode i.e. online or offline for GRC and
arbitration.
The access of the online system should be given to the Trading Members and
Depository Participants.
The entity concerned uploads an Action Taken Report (ATR) on the
Complaints/GRC/Arbitration/Appellate Arbitration;
All Recognized Stock Exchanges including Commodity Derivatives Exchanges /
Depositories peruse the ATR and dispose of the
Complaints/GRC/Arbitration/Appellate Arbitration if it is satisfied that the complaint
has been redressed adequately;
The concerned investor can view the status of the complaint online;
The entity concerned and the concerned investor can seek and provide
clarification(s) online to each other;
The life cycle of a Complaints/GRC/Arbitration/Appellate Arbitration has an audit
trail; and
All the Complaints/GRC/Arbitration/Appellate Arbitration are saved in a central
database which would generate relevant MIS reports to enable all Recognized
Stock Exchanges including Commodity Derivatives Exchanges / Depositories to
take appropriate policy decisions and or remedial actions.
There should be a provision to link the online system with SCORES.
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