THE GAZETTE OF INDIA
PART –II – SECTION 3 – SUB SECTION (ii)
PUBLISHED BY AUTHORITY
SECURITIES AND EXCHANGE BOARD OF INDIA
Mumbai, the 21st day of August, 2003
SECURITIES AND EXCHANGE BOARD OF INDIA
(OMBUDSMAN) REGULATIONS, 2003
S.O. No. 953(E). In exercise of the powers conferred by section 30, read with sub-section (1) of section 11, of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following regulations to provide for the establishment of the office of Ombudsman to redress the grievance of the investors in securities and for matters connected therewith or incidental thereto, namely:-
CHAPTER I PRELIMINARY SHORT TITLE AND COMMENCEMENT
1.(1) These regulations may be called the Securities and Exchange Board of India (Ombudsman) Regulations, 2003.
(2) They shall come into force on the date of their publication in the Official Gazette. Definitions
2. (1) In these regulations, unless the context otherwise requires,-
(a) “Act” means the Securities and Exchange Board of India Act, 1992 (15 of 1992 );
(b) “award” means a finding in the form of direction or an order of an Ombudsman given in accordance with these regulations;
(c) “authorised representative” means a person duly appointed and authorised by a complainant or any other party to the complaint to act on his behalf and represent him in the proceedings before the Ombudsman;
(d) “Board” means the Securities and Exchange Board of India established under section 3 of the Act;
(e) “Chairman” means Chairman of the Board;
(f) “complaint” means a representation in writing containing a grievance as specified in regulation 13 of these regulations;
(g) “complainant” means any investor who lodges complaint with the Ombudsman and includes an investors association recognised by the Board.
(h) “intermediary” means and includes a person referred to in section 12 of the Act;
(i) “investor” means a person who invests or buys or sells or deals in securities;
(j) “listed company” means a company whose securities are listed on a recognised stock exchange and includes a public company which intends to get its securities listed on a recognised stock exchange;
(k) “member” means a member of the Board and includes the Chairman;
(l) “Ombudsman” means any person appointed under regulation 3 of these regulations and unless the context otherwise requires, includes Stipendiary Ombudsman;
(m) “securities” means Securities as defined in clause (h) of section 2 of the Securities Contracts ( Regulation ) Act, 1956 ( 42 of 1956 );
(n) “Stipendiary Ombudsman” means a person appointed under regulation 9 for the purpose of acting as ombudsman in respect of a specific matter or matters in a specific territorial jurisdiction and for which he may be paid such expenses, honorarium or sitting fees as may be determined by the Board from time to time.
(2) Words and expressions used and not defined in these regulations but defined in the Act or in the rules or regulations made under the Act shall have the meanings respectively assigned to them in the Act or in the rules or regulations made under the Act.
ESTABLISHMENT OF OFFICE OF OMBUDSMAN
ESTABLISHMENT AND APPOINTMENT
3. (1) With effect from such date as the Board may, by an order fix, there shall be established an office of Ombudsman for the purposes of these regulations.
(2)The Board may, on recommendation of a Selection Committee, appoint one or more Ombudsmen for such territorial jurisdiction as may be specified from time to time by an order.
(3)The Selection Committee referred in sub-regulation (2) shall consist of the following members, namely:-
1[(i) an expert in the area relating to financial market operations to be
nominated by the Chairman;
(ii) a person having special knowledge and experience of law, finance or economics, to be nominated by the Chairman;]
(iii) a representative of the Board not below the rank of Executive Director who shall be Secretary of the Selection Committee, to be nominated by the Chairman.
(4) At the request of the Board, the Selection Committee may also prepare a panel of persons out of which a person may be appointed as Stipendiary Ombudsman.
(5)The panel under sub-regulation (4) shall remain in force for a maximum period of two years and shall be reconstituted from time to time.
Provided that any person in the existing panel shall be eligible to be included in the reconstituted panel.
LOCATION OF OFFICE
4. (1)Office of the Ombudsman shall be located at the Head Office of the Board and if more than one Ombudsman are appointed then the office of any such Ombudsman may be located at any other office of the Board or any other place as may be specified by the Board from time to time.
1 Substituted by the SEBI (Ombudsman) (Amendment) Regulations, 2003, w.e.f. 5‐12‐2003. Prior to its substitution it read as under:—
“(i) a retired judge of a High Court, to be nominated by the Chairman;
(ii) an expert in the area relating to financial market operations or having special market knowledge and
experience of law, finance or economics, to be nominated by the Chairman.”
Provided that the Stipendiary Ombudsman when appointed for any specific complaint or complaints shall be located at such place as may be specified.
(2) In order to expedite disposal of complaints, the Ombudsman or Stipendiary Ombudsman, as the case may be, may hold sittings at such places within his area of jurisdiction as may be considered necessary and proper by him.
(3) The Board may provide the premises and other infrastructures including staff or secretarial assistance for the office of Ombudsman or Stipendiary Ombudsman, as the case may be.
5. In order to be appointed as an Ombudsman a person shall be –
i. a citizen of India;
ii. of high moral integrity ;
iii. not below the age of forty five years of age; and
a. a retired District Judge or qualified to be appointed a District Judge or
b. having at least ten years experience of service in any regulatory body or
c. having special knowledge and experience in law, finance, corporate matters, economics, management or administration for a period not less than ten years, or
d. an office bearer of investors’ association recognised by the Board having experience in dealing with matters relating to investor protection for a period not less than 10 years.
6. (1) A person shall not be qualified to hold the office of the Ombudsman if he –
(i) is an un-discharged insolvent ;
(ii) has been convicted of an offence involving moral turpitude;
(iii) has been found to be of unsound mind and stands so declared by a competent court;
(iv) has been charge sheeted for any offence including economic offences ; or
(v) has been a whole-time director in the office of an intermediary or a listed company and a period of at least 3 years has not elapsed.
2[Provided that the disqualification provided in clause (v) shall not be applicable in case of a person who has been the whole-time director of a public sector bank or a public sector undertaking.
Explanation – For the purposes of this clause—
(a)’public sector bank’ means—
(i) a corresponding new bank specified in the First Schedule to the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970);
(ii) a corresponding new bank specified in the First Schedule to the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980);
(iii) the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955);
(iv) a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959);
(b) ‘public sector undertaking’ means any corporation established by or under any Central, State or Provincial Act or a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956) which is owned, controlled or managed by the Central Government.]