SEBI circular on Investor Grievance Redressal Mechanism

SEBI circular on Investor Grievance Redressal Mechanism

In order to protect the interests of investors in securities and to promote the development of, and to regulate the securities market, Securities and Exchange Board of India (SEBI) vide Circular No. SEBI/HO/MIRSD/DOS3/P/CIR/2022/78 dated 03^rd June, 2022 has issued notification related to “Investor Redressal Grievance Mechanism” in exercise of the powers conferred under   Section 11 (1) of the Securities and Exchange Board of India Act, 1992 read with Section 10 of the Securities Contract (Regulation) Act, 1956.

Main aim to introduce this circular is to further strengthen the Investor Grievance Redressal Mechanism.

Applicability:

·         Applicable with effect from July 01, 2022.

·         SEBI has amended Circular No. SEBI/HO/MIRSD/DOC/CIR/P/2020/226 dated November 6, 2020.

Key Highlights:

1.      SEBI has introduced a new framework for investor grievance redressal mechanism as part of its effort to strengthen the process.

2.      For any dispute between the member and the client relating to or arising out of the transactions in Stock Exchange, which is of civil nature, the complainant/ member shall first refer the complaint to the IGRC and/ or to arbitration mechanism provided by the Stock Exchange before resorting to other remedies available under any other law.

3.      It is clarified that the sole arbitrator or the panel of arbitrators, as the case may be, appointed under the Stock Exchange arbitration mechanism may consider any claim relating to any dispute between a stock broker and client arising out of the transactions in stock exchange, as per law, and shall always be deemed to have the competence to rule on its jurisdiction.

4.      A complainant/member, who is not satisfied with the recommendation of the IGRC shall avail the arbitration mechanism of the Stock Exchange for settlement of complaints within three months from the date of IGRC recommendation”.

5.      The time period of three months mentioned in the previous sub-clause for filing arbitration shall be applicable only for the cases where the IGRC recommendation is being challenged.

6.      For any arbitration application received without going through IGRC mechanism, the above time period of three months shall not apply, and for such cases the limitation period for filing arbitration shall be governed by the law of limitation, i.e., The Limitation Act, 1963.”

7.      Stock Exchanges and Depositories are advised to:

a)      Make necessary amendments to the relevant bye-laws, rules and regulations, operational instructions, as the case may be, for the implementation of the above circular; and

b)      bring the provisions of this circular to the notice of their constituents and also disseminate the same on the website.

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