Capital markets regulator Sebi on Friday presented a new framework for the investor grievance redress mechanism as part of its efforts to strengthen the process.
The new mechanism will come into effect on July 1, the Securities and Exchange Board of India (Sebi) said in a circular.
For any dispute between the member and the client relating to exchange transactions, which is of a civil nature, the complainant or the member is required to first submit the complaint to the Investor Grievance Mechanism (IGRC) and/or the arbitration mechanism provided by the exchange before resorting to other remedies available under any other law, Sebi said.
To remove doubts, the regulator clarified that the sole arbitrator or the group of arbitrators appointed under the stock market arbitration mechanism can examine any claim relating to any dispute between a broker and a client, arising from stock exchange transactions. , and will always be deemed to have jurisdiction to rule on its jurisdiction.
A Complainant or Member who is not satisfied with the recommendation of the IGRC may avail itself of the arbitration mechanism of the Exchange for the resolution of complaints within three months from the date of the recommendation of the IGRC . The three-month time limit will only apply in cases where the IGRC’s recommendation is challenged.
For any request for arbitration received without going through the IGRC mechanism, the three-month time limit will not apply, and for such cases, the limitation period for filing arbitration will be governed by the law of limitation. .
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