Introduction: The Securities and Exchange Board of India (SEBI), in its continuous effort to bolster investor protection and ensure fair market practices, released a significant notification on 16th August 2023. This notification revolves around the “Securities and Exchange Board of India (Facilitation of Grievance Redressal Mechanism) (Amendment) Regulations, 2023.” The aim is to streamline and expedite the process of resolving investor grievances across various domains falling under SEBI’s purview.
Analysis: The notification encompasses a wide spectrum of regulations overseen by SEBI, such as the Securities and Exchange Board of India (Stock Brokers) Regulations, 1992, the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, the Securities and Exchange Board of India (Portfolio Managers) Regulations, 2020, and many others. The common thread running through these amendments is the introduction of a stringent timeline for addressing investor grievances. The standard duration for resolving grievances has been compressed to twenty-one calendar days from the earlier timeframe.
A noteworthy inclusion is the provision for SEBI to recognize body corporates that will specialize in managing and overseeing the grievance redressal process. This is a significant stride, as it reflects SEBI’s proactive approach in ensuring that grievances are handled efficiently and without undue delay.
Furthermore, the amendments stress the importance of adhering to the prescribed manner for grievance resolution, as specified by the Board. This not only emphasizes uniformity but also promotes a standardized and streamlined approach to addressing investor concerns.
Conclusion: SEBI’s proactive approach in amending and enhancing the grievance redressal mechanism through its 2023 notification demonstrates its unwavering commitment to investor protection and fair market practices. By imposing a shorter timeline for grievance resolution and allowing for the involvement of recognized body corporates, SEBI is setting the stage for a more accountable, transparent, and investor-friendly financial ecosystem in India.
Investor confidence is an essential cornerstone of any robust market, and these amendments reflect SEBI’s dedication to upholding that confidence. The comprehensive nature of the amendments, covering a multitude of regulations, signifies SEBI’s all-encompassing vision to ensure that investors’ concerns are promptly and effectively addressed, fostering a market environment built on trust and accountability.
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SECURITIES AND EXCHANGE BOARD OF INDIA
NOTIFICATION
Mumbai, the 16th August, 2023
SECURITIES AND EXCHANGE BOARD OF INDIA (FACILITATION OF GRIEVANCE REDRESSAL MECHANISM) (AMENDMENT) REGULATIONS, 2023
No. SEBI/LAD-NRO/GN/2023/146.—In exercise of the powers conferred by section 31 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956), section 11, sub-section (2) of section 11A and section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992) and section 25 of the Depositories Act, 1996 (22 of 1996), the Board hereby makes the following regulations to further amend the Securities and Exchange Board of India (Stock Brokers) Regulations, 1992, the Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992, the Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993, the Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993, the Securities and Exchange Board of India (Bankers to an Issue) Regulations, 1994, the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, the Securities and Exchange Board of India (Collective Investment Schemes) Regulations, 1999, the Securities and Exchange Board of India (Issue and Listing of Securitised Debt Instruments and Security Receipts) Regulations, 2008, the Securities and Exchange Board of India {KYC (Know Your Client) Registration Agency} Regulations, 2011, the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012, the Securities and Exchange Board of India (Investment Advisers) Regulations, 2013, the Securities and Exchange Board of India (Research Analysts) Regulations, 2014, the Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014, the Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014, the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Securities and Exchange Board of India (Issue and Listing of Municipal Debt Securities) Regulations, 2015, the Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018, the Securities and Exchange Board of India (Portfolio Managers) Regulations, 2020 and the Securities and Exchange Board of India (Vault Managers) Regulations, 2021, namely:–
1. These regulations may be called the Securities and Exchange Board of India (Facilitation of Grievance Redressal Mechanism) (Amendment) Regulations, 2023.
2. They shall come into force on the date of their publication in the Official Gazette.
3. In the Securities and Exchange Board of India (Stock Brokers) Regulations, 1992, in regulation 9, in clause (e), for the words “one month”, the words “twenty-one calendar days” shall be substituted;
4. In the Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992,
(1) in regulation 9A, in sub-regulation (1), in clause (c), for the words “one month”, the words “twenty-one calendar days” shall be substituted;
(2) after regulation 28B, the following regulation shall be inserted, namely, —
“Grievance Redressal Mechanism.
28C. (1) The Merchant Banker shall redress investor grievances promptly but not later than twenty-one calendar days from the date of receipt of the grievance and in such manner as may be specified by the Board.
(2) The Board may also recognize a body corporate for handling and monitoring the process of grievance redressal within such time and in such manner as may be specified.”
5. In the Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993,
(1) in regulation 9A, in sub-regulation (1), in clause (e), for the words “one month”, the words “twenty-one calendar days” shall be substituted
(2) after regulation 15B, the following regulation shall be inserted, namely, —
“Grievance Redressal Mechanism.
15C. (1) The registrar to an issue and share transfer agent shall redress investor grievances promptly but not later than twenty-one calendar days from the date of receipt of the grievance and in such manner as may be specified by the Board.
(2) The Board may also recognize a body corporate for handling and monitoring the process of grievance redressal within such time and in such manner as may be specified.”;
6. In the Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993,
(1) in regulation 9A, in sub-regulation (1), in clause (c), for the words “one month”, the words “twenty-one calendar days” shall be substituted;
(2) after regulation 14A, the following regulation shall be inserted, namely, —
“Grievance Redressal Mechanism.
14B. (1) The debenture trustee shall redress investor grievances promptly but not later than twenty-one calendar days from the date of receipt of the grievance and in such manner as may be specified by the Board.
(2) The Board may also recognize a body corporate for handling and monitoring the process of grievance redressal within such time and in such manner as may be specified.”
7. In the Securities and Exchange Board of India (Bankers to an Issue) Regulations, 1994,
(1) in regulation 8A, in sub-regulation (1), in clause (d), for the words “one month”, the words “twenty-one calendar days” shall be substituted;
(2) after regulation 16A, the following regulation shall be inserted, namely, —
“Grievance Redressal Mechanism.
16B. (1) The banker to an issue shall redress investor grievances promptly but not later than twenty-one calendar days from the date of receipt of the grievance and in such manner as may be specified by the Board.
(2) The Board may also recognize a body corporate for handling and monitoring the process of grievance redressal within such time and in such manner as may be specified.”.
8. In the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, after regulation 60, the following shall be inserted, namely, —
“Grievance Redressal Mechanism.
60A. (1) The asset management company shall redress investor grievances promptly but not later than twenty-one calendar days from the date of receipt of the grievance and in such manner as may be specified by the Board.
(2) The Board may also recognize a body corporate for handling and monitoring the process of grievance redressal within such time and in such manner as may be specified.”
9. In the Securities and Exchange Board of India (Collective Investment Schemes) Regulations 1999,
(1) in regulation 11, in clause (f), for the words “one month”, the words “twenty-one calendar days” shall be substituted;
(2) after regulation 14A, the following shall be inserted, namely, –
“Grievance Redressal Mechanism.
14B. (1) The Collective Investment Management Company shall redress investor grievances promptly but not later than twenty-one calendar days from the date of receipt of the grievance and in such manner as may be specified by the Board.
(2) The Board may also recognize a body corporate for handling and monitoring the process of grievance redressal within such time and in such manner as may be specified.”;
10. In the Securities and Exchange Board of India (Issue and Listing of Securitised Debt Instruments and Security Receipts) Regulations, 2008,
(1) in regulation 7, in clause (c), for the words “one month”, the words “twenty-one calendar days” shall be substituted.
(2) in regulation 11, in sub-regulation (3), after clause (q), the following shall be inserted, namely, –
“(r) redress investor grievances promptly but not later than twenty-one calendar days from the date of receipt of the grievance and in such manner as may be specified by the Board.”;
(3) after regulation 11, the following shall be inserted, namely, –
“Grievance Redressal Mechanism.
11A. The Board may recognize a body corporate for handling and monitoring the process of grievance redressal within such time and in such manner as may be specified.”
11. In the Securities and Exchange Board of India {KYC (Know Your Client) Registration Agency} Regulations, 2011, after regulation 16B, the following regulation shall be inserted, namely, —
“Grievance Redressal Mechanism.
16C. (1) The KRA shall redress investor grievances promptly but not later than twenty-one calendar days from the date of receipt of the grievance and in such manner as may be specified by the Board.
(2) The Board may also recognize a body corporate for handling and monitoring the process of grievance redressal within such time and in such manner as may be specified.”;
12. In the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012, after regulation 24, the following shall be inserted, namely, –
“Grievance Redressal Mechanism.
24A. (1) The Manager shall redress investor grievances promptly but not later than twenty-one calendar days from the date of receipt of the grievance and in such manner as may be specified by the Board.
(2) The Board may also recognize a body corporate for handling and monitoring the process of grievance redressal within such time and in such manner as may be specified.”
13. In the Securities and Exchange Board of India (Investment Advisers) Regulations, 2013, in regulation 21, sub-regulation (1) shall be substituted with the following, namely, –
“(1) The Investment Adviser shall redress investor grievances promptly but not later than twenty-one calendar days from the date of receipt of the grievance and in such manner as may be specified by the Board.”
14. In the Securities and Exchange Board of India (Research Analysts) Regulations, 2014, after regulation 26A, the following shall be inserted, namely, —
“Redressal of investor grievances
26B. (1) The Research Analyst shall redress investor grievances promptly but not later than twenty-one calendar days from the date of receipt of the grievance and in such manner as may be specified by the Board.
(2) The Board may also recognize a body corporate for handling and monitoring the process of grievance redressal within such time and in such manner as may be specified.”
15. In the Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014, after regulation 26E, the following shall be inserted, namely, –
“Grievance Redressal Mechanism.
26F. (1) The Manager shall redress investor grievances promptly but not later than twenty-one calendar days from the date of receipt of the grievance and in such manner as may be specified by the Board.
(2) The Board may also recognize a body corporate for handling and monitoring the process of grievance redressal within such time and in such manner as may be specified.”
16. In the Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014, after regulation 26K, the following shall be inserted, namely, –
“Grievance Redressal Mechanism.
26L. (1) The Manager shall redress investor grievances promptly but not later than twenty-one calendar days from the date of receipt of the grievance and in such manner as may be specified by the Board.
(2) The Board may also recognize a body corporate for handling and monitoring the process of grievance redressal within such time and in such manner as may be specified.”
17. In the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, in regulation 13,
(1) sub-regulation (1) shall be substituted with the following, namely, –
“(1) The listed entity shall redress investor grievances promptly but not later than twenty-one calendar days from the date of receipt of the grievance and in such manner as may be specified by the Board.”.
(2) after sub-regulation (4), the following sub-regulation shall be inserted, namely, –
“(5) The Board may also recognize a body corporate for handling and monitoring the process of grievance redressal within such time and in such manner as may be specified.”
18. In Securities and Exchange Board of India (Issue and Listing of Municipal Debt Securities) Regulations, 2015, after regulation 27B, the following shall be inserted, namely, –
“Grievance Redressal Mechanism.
27C. (1) The issuer shall redress investor grievances promptly but not later than twenty-one calendar days from the date of receipt of the grievance and in such manner as may be specified by the Board.
(2) The Board may also recognize a body corporate for handling and monitoring the process of grievance redressal within such time and in such manner as may be specified.”
19. In the Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018,
(1) in regulation 7, in clause (g), for the words “thirty days”, the words “twenty-one calendar days” shall be substituted;
(2) in regulation 36, in sub-regulation (2), in clause (f), for the words “thirty days”, the words “twenty-one calendar days” shall be substituted;
(3) regulation 72 shall be substituted with the following, namely –
“Redressal of investor grievances
72. (1) The issuer or its agent or any person who is registered as an intermediary under these regulations shall redress investor grievances promptly but not later than twenty-one calendar days from the date of receipt of the grievance and in such manner as may be specified by the Board.
(2) The Board may also recognize a body corporate for handling and monitoring the process of grievance redressal within such time and in such manner as may be specified.”
20. In the Securities and Exchange Board of India (Portfolio Managers) Regulations, 2020,
(1) in regulation 11, in clause (d), for the words “one month”, the words “twenty-one calendar days” shall be substituted;
(2) after regulation 34, the following shall be inserted, namely, –
“Grievance Redressal Mechanism.
34A. (1) The Portfolio Manager shall redress investor grievances promptly but not later than twenty-one calendar days from the date of receipt of the grievance and in such manner as may be specified by the Board.
(2) The Board may also recognize a body corporate for handling and monitoring the process of grievance redressal within such time and in such manner as may be specified.”
21. In the Securities and Exchange Board of India (Vault Managers) Regulations, 2021, after regulation 16A, the following shall be inserted, namely, –
“Grievance Redressal Mechanism.
16B. (1) The Vault Manager shall redress investor grievances promptly but not later than twenty-one calendar days from the date of receipt of the grievance and in such manner as may be specified by the Board.
(2) The Board may also recognize a body corporate for handling and monitoring the process of grievance redressal within such time and in such manner as may be specified.”
BABITHA RAYUDU, Executive Director
[ADVT.-III/4/Exty./363/2023-24]
