Volume 2 Issue 7

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SEBI examines alternate dispute resolution mechanism for investors, regulated entity

Date of News: 


Date of Publication: 


Unique ID:


Name of the Author: 

Pranjal Singh

Field of Law: 

Alternative Dispute Resolution

Content of News:

To provide effective mechanism for resolving disputes between investors and regulate entities, capital market regulator SEBI is in the process of introducing an alternative dispute resolution mechanism. SEBI in November 2021 published the �Investor Charter� for securities markets to protect investor�s interest, to promote transparency in market and enhance awareness, trust and confidence among investors. Different charters relating to investor related activities of various intermediaries have been developed by SEBI in consultation with respective entities. The charter contains information relating to details of various services provided by intermediaries to investors; it also contains provisions giving information about the importance of preservation of various relevant documents by the investors and also has provisions relating to grievance redressal mechanism. Efforts have been made to enhance the effectiveness of grievance redressal mechanism. It has been publishing the status of disposal of investor grievance received in SEBI complaints redress system on its website on monthly basis details of grievances of the investors which haven�t been addressed for three months are also being published. One of the regulators of SEBI said that in case SEBI receives large numbers of complaints on any issue the root cause of it would be considered and would be rectified as soon as possible. Some of the steps taken in this direction are amendments pertaining to the investor protection fund or investor service fund and its related matters to expand the scope of dispute resolution. SEBI is also considering the possibility of introducing new alternative dispute mechanism in various agreements between regulated entities and their clients. Separate charters have been developed for exchanges, depositories; SEBI registered intermediaries and regulated entities including stock brokers, depository participants, asset management companies, registrar and transfer agents, investment advisors, research analyst, and merchant bankers. These charters have been enacted for the sole purpose to help the investors improve their ease of investing in securities market.