The Securities and Exchange Board of India (SEBI) has issued a circular on dispute resolution mechanism for settlement of disputes or claims arising out of transactions cleared and settled by Limited Purpose Clearing Corporation (LPCC). This circular was issued on 17th April, 2023 and has come into immediate effect.
Accordingly SEBI has directed that a LPCC shall adopt the following dispute resolution mechanism:
Disputes between Clearing Members inter-se
The disputes arising between Clearing Members inter-se of the LPCC shall be settled by conciliation and/or by an arbitration panel consisting of three Clearing Members other than the Clearing Member(s).
Disputes between Clearing Member or its Clients and the LPCC
All disputes between a Clearing Member and the LPCC shall be resolved as per the dispute resolution mechanism prescribed by SEBI from time to time.
In case a Clearing Member or the LPCC is not satisfied with the decision as per such mechanism, then the disputes between the Clearing Member and LPCC shall be resolved in accordance with the procedure laid down in the Payment and Settlement Systems Act, 2007 and rules/ directions notified thereunder.
Disputes Between the Clearing Member(s) and their Clients and Disputes between the LPCC and its vendors/suppliers/service providers
Such disputes shall be resolved as per the dispute resolution mechanism prescribed by SEBI from time to time.
