SEBI vide its Circular dated 17th April, 2023 issued for All Recognized Limited Purpose Clearing Corporations, Recognized Stock Exchange.
The Notification states:
Securities Exchange Board of India (SEBI) released a circular announcing a dispute resolution mechanism for Limited Purpose Clearing Corporation (LPCC). The mechanism will be placed for the settlement of disputes or claims arising out of transactions cleared and settled by the regulator, in the manner specified by SEBI in consultation with the Reserve Bank of India.
The dispute resolution mechanism will be used to settle disputes between clearing members; contention between the clearing members and their clients; differences between the LPCC and its vendors; and disputes between clearing members or its clients and the LPCC.
LPCC shall adopt the dispute resolution mechanism prescribed by the market regulator.
If there are any disagreements that arise among the clearing members of LPCC, they will be resolved through the process of conciliation or by an arbitration panel made up of three clearing members who are not involved in the dispute. The ruling of the arbitration panel would be considered final and binding for the parties involved.
SEBI has announced that any disputes between a clearing member and the LPCC will be settled following the prescribed dispute resolution mechanism.
If either the LPCC or a clearing member is not satisfied with the decision made through SEBI’s mechanism, then the disputes between them will be resolved using the procedure outlined in the Payment and Settlement Systems Act of 2007, along with the corresponding rules and directions that have been notified.
This circular shall come into force with immediate effect.
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