DYK: Stock exchange will resolve complaints in 15 days
2 min read . Updated: 25 Dec 2013, 06:39 PM IST
PremiumIf you have a claim of up to `10 lakh, the exchange will give you monetary relief
In 2013, the Securities and Exchange Board of India (Sebi) took the initiative to strengthen the investor redressal mechanism. To make it more effective, Sebi decided to shorten the time taken for the proceedings as well as to give monetary relief to investors, in case of pending proceedings.
The change
If you have a complaint, bourses have to ensure that it is resolved within 15 days at their end. Also, if you have a claim of up to 10 lakh, the exchange will give you monetary relief during the proceeding’s period from the Investor Protection Fund (IPF) of the stock exchanges. The stock exchanges have been asked to block the value from the deposit of the member (stock broker, trading member or clearing member).
If the complaint doesn’t get resolved at the exchange level, a conciliation process will start immediately. If it is not resolved even at this level, the Investor Grievance Redressal Committee (IGRC) will be given 15 days to resolve the investor complaint. In case the matter is not resolved through the conciliation process, IGRC will find a claim value acceptable to the investor.
The exchange will then block the amount from the deposit of the member. If the member doesn’t opt for arbitration, the exchange will give the blocked amount to the investor after seven days.
Arbitration process
If a member goes for arbitration and the claim is up to 10 lakh, the lesser of 50% of the claim value or 75,000 will have to be given to the investor. Now, if the arbitration favours the investor and the member opts for appellate arbitration, 50% of the amount awarded in the earlier arbitration minus the amount paid earlier, or 1.5 lakh, whichever is less, will be given to the investor.
If the verdict is in favour of the investor, the amount given to the investor will be returned to the IPF from the blocked amount and the rest will be paid to the investor.
In case the appellate arbitration award is in favour of the investor and the member opts for making an application under section 34 of the Arbitration and Conciliation Act, 1996, then 75% of the amount determined in the appellate arbitration award minus the amount paid after appellate arbitration, or 2 lakh, whichever is less, will be given to the investor. In a fiscal, the member can’t give more that 5 lakh to the investor.
If the investor loses the proceedings at any stage and decides not to pursue further, then she will have to refund the amount. If she doesn’t, she will not be allowed to trade till refund is made and securities lying in the demat account will also be frozen.
