To allow investors to file complaints and track the status of redress for those grievances, capital markets regulator Sebi on Monday asked exchanges and depositories to launch their own online complaint redress system within six months. month.
This is in line with the SCORES online platform launched by the capital markets regulator in June 2011 to help investors file their securities market complaints against listed companies and Sebi-registered intermediaries.
SCORES stands for Sebi Complaints Redress System.
“All recognized exchanges, including commodity derivatives exchanges/custodians, are advised to design and implement their own online complaints handling system, which will allow investors to file complaints and escalate complaints for redress through Grievance Redress Committee (GRC), Arbitration, Appellate Arbitration, etc. in accordance with their respective statutes, rules and regulations,” said the Securities and Exchange Board of India (Sebi) in a circular.
The redress mechanism will be implemented within six months, he added.
The new system aims to expedite redress or resolution of investor complaints, as it would also eliminate the need for physical movement of complaints.
In addition, the possibility of loss, damage or misdirection of physical complaints would be avoided. It would also facilitate easy retrieval and tracking of complaints at any time.
Sebi said the system should be web-enabled and provide 24-hour online access.
Listing the features of the new system, the regulator said complaints and reminders about it are filed online anytime and from anywhere. Additionally, an email is instantly generated acknowledging receipt of the complaint and assigning a unique registration number for future reference and follow-up.
Also, there should be a provision to link the online system with SCORES.
In addition, Sebi called on the exchanges to pursue the hybrid mode – online and offline – of conducting the RCMP and the arbitration or appellate arbitration process. Also, custodians will have to follow the hybrid mode.
During the Covid-19 pandemic, stock exchanges have been advised to conduct GRC hearings and arbitration or appellate arbitration online for faster processing of complaints. The online process saves parties involved time and money, which is in the interest of investors.
All exchanges and depositories have been asked to widely publicize its online complaints handling system.
In addition, the regulator changed the amount of the deposit to be made by the investor at the time of the request for arbitration.
“A client, who has a claim/counterclaim up to Rs 20 lakh and files an arbitration reference, will be exempted from paying the fee,” Sebi said.
If the dispute involves a claim amount less than or equal to Rs 20 lakh, the investor, claimant or defendant, is exempted from paying the fee for arbitration costs and the exchange will bear the same on behalf of the investor.
Previously, the claim limit was Rs 10 lakh.