The Securities and Exchange Board of India on 22nd October 2021 has amended the framework for investor grievance redressal system and arbitration mechanism at stock exchanges.
In order to further enhance the effectiveness of Investor Grievance Redressal System and Arbitration Mechanism at the Stock Exchanges, based on the internal deliberations/discussions, and the feedback received from the Stock Exchanges, it has been decided to add/modify certain provisions.
Under the revised framework, SEBI has clarified that Forming of exclusive panel for appellate arbitration is not required and members can serve on both the panels. However, it is imperative for the exchanges to ensure that in the same matter, the members of arbitration panel are not considered for constituting the appellate arbitration panel if the matter goes to appeal.
Further as per clause 2. A(viii) deals with the place of arbitration in which if the award amount is more than Rs. 50 lakhs, the next level of proceedings (arbitration or appellate arbitration) may take place at the nearest metro city, if so desired by any of the parties involved. The additional statutory cost for arbitration,if any, shall be borne by the party desirous of shifting the place of arbitration.”
In respect of threshold limit for interim relief paid out of the Investors Protection Fund (IPF) in stock exchanges, Sebi has laid out a procedure that needs to be undertaken by the bourses in case the order is in favour of a client and the member opts for arbitration wherein the claim value admissible to the client is not over ₹20 lakh.
The revised framework shall be applicable from 1st January 2022.
