SEBI amends Investor Redressal Mechanism to strengthen process.

SEBI amends Investor Redressal Mechanism to strengthen process.

The Stock Exchanges and Depositories are advised to make relevant amendments to the bye-laws, rules, regulations, and operational instructions to comply with the Circular.

The Securities Exchange Board of India on Friday amended its Investor Grievance Redressal Mechanism to further strengthen the process. The amendments were made upon examination of the feedback received by the market participants.

The Circular was issued under the exercise of 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 to protect the interests of investors in securities and to further promote the development and regulations of the securities market.

In the event of any dispute between the member and the client arising due to transactions of stock exchange, the member may first refer to either the IGRC or the arbitration mechanism provided by the Stock Exchange prior to resorting to any other remedy. SEBI clarified for the avoidance of any doubt that the arbitrator(s) shall deem to have the competence to rule on its jurisdiction.

Upon being dissatisfied with the recommendation of the IGRC, the member may then avail to the arbitration mechanism of the Stock Exchange for the settlement of complaints within 3 months from the date of receipt of the recommendation by IGRC. The time period of three months is only available for the cases where the IGRC's recommendations are challenged.

For any arbitration application received without going through the IGRC mechanism, the limitation period for the filing of an arbitration application as set out in the Limitation Act, 1963 shall apply.

The Circular shall come into force on 1 July 2022.