SEBI Introduces New Alternative Dispute Resolution Mechanism vide ADR Amendment Regulations 2023

SEBI Introduces New Alternative Dispute Resolution Mechanism vide ADR Amendment Regulations 2023

The Securities and Exchange Board of India (SEBI) has issued a notification, introducing amendments to the Alternative Dispute Resolution Mechanism Regulations.

These amendments aim to enhance the dispute resolution process in the securities market by incorporating mediation, conciliation, and arbitration methods.

The Amendment provides the following:

(a) Amendments to the Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992: A new regulation, 28B, is inserted by which all claims, differences or disputes between a merchant banker and its client arising out of or in relation to the activities of the merchant banker in the securities market shall be submitted to a dispute resolution mechanism that includes mediation and/or conciliation and/or arbitration.

(b) Amendments to the Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993: A new regulation, 15B, is inserted, by which all claims, differences or disputes between a registrar to an issue and share transfer agent and its client and investor arising out of or in relation to the activities of the registrar to an issue and share transfer agent in the securities market shall be submitted to a dispute resolution mechanism that includes mediation and/or conciliation and/or arbitration.

(c) Amendments to the Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993: A new regulation, 14A, is inserted, through which all claims, differences or disputes between a debenture trustee and a body corporate which has appointed the debenture trustee, arising out of or in relation to the activities of the debenture trustee in the securities market shall be submitted to a resolution mechanism that includes mediation and/or conciliation and/or arbitration.

(d) Amendments to the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996: A new regulation, 59B, is inserted, which requires all claims, differences or disputes between the asset management company and investors arising out of or in relation to the activities of the asset management company in the securities market shall be submitted to a dispute resolution mechanism that includes mediation and/or conciliation and/or arbitration.

(e) Amendments to the Securities and Exchange Board of India (Custodian) Regulations, 1996: A new regulation, 17A, is inserted, where all claims, differences or disputes between a custodian and its client arising out of or in relation to the activities of the custodian in the securities market shall be submitted to a dispute resolution mechanism that includes mediation and/or conciliation and/or arbitration.

(f) Amendments to the Securities and Exchange Board of India (Credit Rating Agencies) Regulations, 1999: A new regulation, 14A, is inserted, which mandates all claims, differences or disputes between a credit rating agency and its client arising out of or in relation to the activities of the credit rating agency in the securities market shall be submitted to a dispute resolution mechanism that includes mediation and/or conciliation and/or arbitration.

(g) Amendments to the Securities and Exchange Board of India (Collective Investment Schemes) Regulations, 1999: A new regulation, 14A, is inserted by which all claims, differences or disputes between the Collective Investment Management Company and investors arising out of or in relation to the activities of the Collective Investment Management Company in the securities market shall be submitted to a resolution mechanism that includes mediation and/or conciliation and/or arbitration.

(h) Amendments to the Securities and Exchange Board of India (KYC Registration Agency) Regulations, 2011: A new regulation, 16B, is inserted, where all claims, differences or disputes between a KYC Registration Agency and an Intermediary arising out of or in relation to the activities of the KRA in the securities market shall be submitted to a dispute resolution mechanism that includes mediation and/or conciliation and/or arbitration.

(i) Amendments to the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012: Regulation 25 is substituted with a new version requiring, all claims, differences or disputes between investors and the Alternative Investment Fund or the Manager arising out of or in relation to the activities of the Alternative Investment Fund or the Manager in the securities market shall be submitted to a dispute resolution mechanism that includes mediation and/or conciliation and/or arbitration.

(j) Amendments to the Securities and Exchange Board of India (Investment Advisers) Regulations, 2013: Regulation 21 is modified, mandating that all claims, differences, or disputes between an Investment Adviser and its client shall be submitted to a dispute resolution mechanism. The mechanism includes mediation, conciliation, and/or arbitration.

(k) Amendments to the Securities and Exchange Board of India (Research Analysts) Regulations, 2014: A new regulation, 26A, is inserted, incorporating all claims, differences or disputes between a research analyst or research entity and its client arising out of or in relation to the activities of the research analyst or research entity in the securities market shall be submitted to a dispute resolution mechanism that includes mediation and/or conciliation and/or arbitration.

(l) Amendments to the Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014: A new regulation, 22A, is inserted, mandating all claims, differences or disputes between investors and the investment manager arising out of or in relation to the activities of the investment manager in the securities market shall be submitted to a resolution mechanism that includes mediation and/or conciliation and/or arbitration.

(m) Amendments to the Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014: A new regulation, 22A, is inserted, where all claims, differences or disputes between investors and the manager arising out of or in relation to the activities of the manager in the securities market shall be submitted to a dispute resolution mechanism that includes mediation and/or conciliation and/or arbitration.

(n) Amendments to the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015: The requirement for arbitration in case of claims, differences, or disputes under regulation 40 is omitted. Instead, all claims, differences or disputes between a foreign portfolio investor and a designated depository participant arising out of or in relation to the activities of the designated depository participant in the securities market shall be submitted to a dispute resolution mechanism that includes mediation and/or conciliation and/or arbitration.

(o) Amendments to the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019: A new regulation, 24A, is inserted, mandating the submission of all claims, differences, or disputes between a foreign portfolio investor and a designated depository participant to a dispute resolution mechanism that includes mediation and/or conciliation and/or arbitration.

(p) Amendments to the Securities and Exchange Board of India (Portfolio Managers) Regulations, 2020: A new regulation, 22A, is inserted where all claims, differences or disputes between investors and the portfolio manager arising out of or in relation to the activities of the portfolio manager in the securities market shall be submitted to a dispute resolution mechanism that includes mediation and/or conciliation and/or arbitration.

(q) Amendments to the Securities and Exchange Board of India (Vault Managers) Regulations, 2021: A new regulation, 16A, is inserted, requiring all claims, differences or disputes between a vault manager and a beneficial owner arising out of or in relation to the activities of the vault manager in the securities market shall be submitted to a dispute resolution mechanism that includes mediation and/or conciliation and/or arbitration.