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Market regulator SEBI has strengthened the investor grievance redressal mechanism in the securities market and amended various regulations to operationalise Online Dispute Resolution (ODR) for investors and clients of intermediaries across all registered intermediaries/regulated entities.
This move comes in the backdrop of increased investor participation in the securities market in India and emergence of technology aided dispute resolution frameworks.
A specific amendment on dispute resolution has been introduced in each of the respective SEBI regulations on merchant bankers; Registrars/Share Transfer Agents; debenture trustees; mutual funds; custodians; credit rating agencies; Alternative Investment Funds; Research Analysts; Real Estate Investment Trusts; Infrastructure Investment Trusts; Foreign Portfolio Investors; Portfolio Managers and Vault Managers,
ODR mechanism is now being harnessed by extending the Market Infrastructure Institutions (MII) administered conciliation and arbitration and arbitration mechanism to registered intermediaries/regulated entities and their investors/clients.
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With the aid of ODR institutions, the capacity of MII administered conciliation and arbitration mechanism is being expanded.
SEBI Board has already given its nod for conducting proceedings in a hybrid mode (mix of physical and online or only online approach).
Meanwhile, SEBI Board has also recently approved a proposal to revamp SEBI Complaint Redressal System (SCORES) by reducing timelines, introducing auto-routing of the complaint to concerned regulated entities and auto escalation of complaints in case of non adherence to the prescribed timelines by the regulated entity.
Designated bodies will be recognised for monitoring and handling of grievances of the investors against the respective regulated entities.
Two levels of review will be provided —first review by the designated body if investor is dissatisfied with the resolution provided by concerned regulated entity. The second review by SEBI if the investor is still dissatisfied after first review.
SEBI has also approved the linking of SCORES with Online Dispute resolution (ODR) platform, thereby providing an additional option for investors of all regulated entities. A new portal will be created for collection of market intelligence inputs.
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It maybe recalled that SEBI had in December last year brought out a consultation paper on strengthening the investor grievance redressal mechanism in the Indian securities market by harnessing Online Dispute Resolution mechanisms.
The latest set of measures on part of SEBI to harness ODR is flowing out of the recommendations of this consultation paper.
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