The Supreme Court’s decision on January 27 to ‘not grant a complete stay’ on a recent order by the Securities and Appellate Tribunal (SAT) that questioned SEBI’s poor handling of investor complaints is a stark warning to the market regulator on its accountability. SEBI had kicked off a storm over the question of its ‘judicial accountability’ by challenging the SAT order with regard to its dealing with investor complaints on SCORES, the online grievance platform. Effectively, the apex court wants SEBI to be accountable to both investors and the judiciary.

SAT’s direction to SEBI came after it observed that the latter had disposed of investor complaints filed on SCORES without deciding or settling the issues raised in the complaints and by turning them into market intelligence. According to SAT, a communication from SEBI told the investors that the status of their complaints cannot be ascertained as the “information shall be treated as confidential, analysed and, if found necessary, further action will be taken. The status of the information cannot be ascertained as SEBI conducts the investigations confidentially and in a holistic manner.” SAT had termed SEBI’s response to the investors a ‘mere eyewash’.

SEBI’s application to the Supreme Court, seen by BusinessLine , effectively says its handling of complaints on the SCORES platform is an administrative matter and not appealable in the courts. Simply put, when a market investor files a complaint with SEBI, the regulator does not want to be accountable with regard to giving out details or what it does with the complaint. Interestingly, SEBI’s application to the apex court further says that “SAT has grossly erred by failing to appreciate that the SCORES platform has been set up by SEBI to facilitate investor grievances and cannot be equated with quasi-judicial proceedings. Basically, SEBI says it has a platform for online grievance where investors are required to file their complaints against listed companies.

But when the platform communicates to them that their complaint were turned into market intelligence, about which no inquiry is allowed, the investors are also not supposed to have a legal recourse. Is this fair?

Palak ShahSenior Assistant Editor

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