Master Circular for Online Resolution of Disputes in the Indian Securities Market
- After extensive public consultations and in furtherance of the interests of investors and consequent to the gazette notification (dated July 3, 2023) of the SEBI (Alternative Dispute Resolution Mechanism) (Amendment) Regulations, 2023 the existing dispute resolution mechanism in the Indian securities market is being streamlined under the aegis of Stock Exchanges and Depositories (collectively referred to as Market Infrastructure Institutions(MIIs)),1 by expanding their scope and by establishing a common Online Dispute Resolution Portal (“ODR Portal”) which harnesses online conciliation and online arbitration for resolution of disputes arising in the Indian Securities Market.
Investors and Listed Companies/Specified Intermediaries/Regulated entities under the ambit of ODR
2. Disputes between Investors/Clients and listed companies (including their registrar and share transfer agents) or any of the specified intermediaries / regulated entities in securities market (as specified in Schedule A) arising out of latter’s activities in the securities market, will be resolved in accordance with this circular and by harnessing online conciliation and/or online arbitration as specified in this circular. Listed companies / specified intermediaries / regulated entities OR their clients/investors (or holders on account of nominations or transmission being given effect to) may also refer any unresolved issue of any service requests / service related complaints for due resolution by harnessing online conciliation and/or online arbitration as specified in this circular.
3. Disputes between institutional or corporate clients and specified intermediaries / regulated entities in securities market as specified in Schedule B can be resolved, at the option of the institutional or corporate clients: a. in accordance with this circular and by harnessing online conciliation and/or online arbitration as specified in this circular; OR b. by harnessing any independent institutional mediation, conciliation and/or online arbitration institution in India. For existing and continuing contractual arrangements between institutional or corporate clients and specified intermediaries / regulated entities in the securities market as specified in Schedule B, such option should be exercised within a period of six months, failing which option as specified in (a) above will be deemed to have been exercised. For all new contractual arrangements, such choice should be exercised at the time of entering into such arrangements.
4. Disputes between MII and its constituents which are contractual in nature shall be included in the framework at a future date as may be specified while expressly excluding disputes/appeals/reviews/challenges pertaining to the regulatory, enforcement role and roles of similar nature played by MIIs.
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