Redressal of investor grievances through the SEBI Complaint Redressal (SCORES) Platform and linking it to Online Dispute Resolution platform.
In a significant move, the Securities and Exchange Board of India (SEBI) vide its Circular No. SEBI/HO/OIAE/IGRD/CIR/P/2023/156 dated September 20, 2023 has introduced crucial revisions to the process of addressing investor grievances against entities. These revisions are aimed at streamlining and enhancing the efficiency of grievance redressal. SEBI’s Complaint Redressal (SCORES) Platform now plays a pivotal role in this process, connecting seamlessly with Online Dispute Resolution mechanisms.
SEBI revised the extant process for redressal of investors’ grievances against Entities and provide for a mechanism through which Designated Bodies* may monitor the process of the redressal of investors’ grievances by Entities.
(*Designated bodies shall mean the Stock Exchanges in case of Listed Company being an intermediary.)
Implementation of this circular:
The provisions of this circular shall come into force with effect from December 4, 2023.
The Entities shall, submit the Action Taken Report (“ATR”) on SCORES within 21 calendar days from the date of receipt of the complaint.
The designated bodies may apply for SCORES Authentication and/or for Application Programming Interface (API) integration within such period so as to ensure that Designated Bodies can comply with provisions of this circular by December 4, 2023 and onwards.
FRAMEWORK FOR HANDLING OF INVESTOR GRIEVANCES RECEIVED THROUGH SCORES BY ENTITIES AND MONITORING OF THE REDRESSAL PROCESS BY DESIGNATED BODIES:
1. Submission of the Complaint and handling of the Complaint by the Entity:
All Entities who are in receipt of the complaints of the investors (“Complaint”) through SCORES, shall resolve the complaint and upload the ATR on SCORES within 21 calendar days of receipt of the Complaint. The ATR of the entity will be automatically routed to the complainant.
2. First review of the Complaint:
In case complainant is satisfied with the resolution provided by the entity vide the ATR or complainant does not choose to review the Complaint, the Complaint shall be disposed on SCORES. However, if the complainant is not satisfied, the complainant may request for a review of the resolution provided by the entity within 15 calendar days from the date of the ATR.
In case the complainant has requested for a review of the resolution provided by the entity or the entity has not submitted the ATR within the stipulated time of 21 calendar days, the concerned Designated Body shall take cognizance of the Complaint for first review of the resolution through SCORES. The Designated Body shall take up the first review with the concerned Entity, wherever required. The concerned Entity shall submit the ATR to the Designated Body within the time stipulated by the Designated Body.
The Designated Body may seek clarification on the ATR submitted by the Entity for the first review. The concerned Entity shall provide clarification to the respective Designated Body, wherever sought and within such timeline, as the Designated Body may stipulate. The Designated Body shall stipulate the timeline in such as manner to ensure that the Designated Body submits the revised ATR to the complainant on SCORES within 10 calendar days of the review sought.
3. Second review of the Complaint:
The complainant may seek a second review of the Complaint within 15 calendar days from the date of the submission of the ATR by the Designated Body. In case the complainant is satisfied with the ATR provided by the concerned Designated Body or complainant does not choose to review the Complaint within the period of 15 calendar days, the Complaint shall be disposed on SCORES.
In case the complainant is not satisfied with the ATR provided by the Designated Body or the concerned Designated Body has not submitted the ATR within 10 calendar days, SEBI may take cognizance of the Complaint for second review through SCORES.
SEBI may take up the review with stakeholders involved, including the concerned entity or/and Designated Body. The concerned entity or/and Designated Body shall take immediate action on receipt of second review complaint from SEBI and submit revised ATR to SEBI through SCORES, within the timeline specified by SEBI.
SEBI or the Designated Body (as the case may be) may seek clarification on the ATR submitted by the concerned entity for SEBI review complaint. The concerned entity shall provide clarification to the respective Designated Body and/or SEBI, wherever sought and within such timeline as specified. The second review Complaint shall be treated as ‘resolved’ or ‘disposed’ or ‘closed’ only when SEBI ‘disposes’ or ‘closes’ the Complaint in SCORES. Hence, mere filing of ATR with respect to SEBI review complaint will not mean that the SEBI review complaint is disposed.
ACTION FOR FAILURE TO REDRESS INVESTOR COMPLAINTS BY LISTED COMPANIES:
The Designated Stock Exchange (DSE) shall levy a fine of ₹1000 per day per complaint on the listed company for violation of Regulation 13 (1) of SEBI Listing Regulations and also directing it to submit ATRs on the pending complaints and payment of the fines within 15 days from the date of such notice.
Failure in doing so, the concerned DSE shall issue notices to the promoter(s) of such listed company, to ensure submission of ATRs on the pending complaints and payment of fines by the listed company within 10 days from the date of such notice.
Failure in doing so, the depository(ies) on receiving the intimation from DSE shall immediately freeze the entire shareholding of the promoter(s) in such listed company as well as all other securities held in the demat account of the promoter(s) and also intimate the promoter(s) about the details of non-compliances resulting in freezing of their demat accounts.
Amount of fine shall continue to accrue till the date of filing of ATR to the effect of redressal of grievance by the company or till the company is compulsorily delisted, whichever is earlier.
Upon exhaustion of all options as mentioned hereinabove, and if the number of pending complaints exceed 20 or the value involved in such complaints is more than ₹10 lakhs, stock exchanges shall forward all the complaints against such listed companies to SEBI for further action, if any.
ONLINE DISPUTE RESOLUTION MECHANISM:
In cases where investors raise issues, which require adjudication on any third-party rights, on questions of law or fact or which is in the nature of a lis between parties, or if investors are not satisfied with disposal on SCORES post SEBI review, they shall seek appropriate remedies through the Online Dispute Resolution mechanism in securities market. In addition, investors have the option to approach legal forums including civil courts, consumer courts etc.
Investors can approach the Online Dispute Resolution mechanism or other appropriate civil remedies at any point of time. In case the complainant opts for Online Dispute Resolution mechanism or other appropriate civil remedies while the complaint is pending on SCORES, the complaint shall be treated as disposed on SCORES.
Conclusion
SEBI’s revised framework, integrating SCORES and Online Dispute Resolution, ushers in a more efficient and transparent process for addressing investor grievances. It underscores SEBI’s commitment to safeguarding investor interests and maintaining the integrity of India’s securities market. This development ensures timely redressal and compliance, fostering confidence among investors and market participants.
Author Bio
I could not follow up my complaint with SEBI SCORES.this was more than one month ago. can I put another complaint of the same incident