SEBI Circular on Investor Grievance Redressal Mechanism – 03rd June, 2022

SEBI, vide its Circular dated 03^rd June, 2022 made amendment to Circular dated 06^th November, 2020 based on feedback received from market participants in order to further strengthen the Investor Grievance Redressal Mechanism.

Amendment to Circular dated 06^th November, 2020 –

Clause 4 of the Circular dated November 6, 2020 shall be substituted with the following, namely, – 

“4. Arbitration

• For any dispute between the member and the client relating to or arising out of the transactions in Stock Exchange, which is of civil nature, the complainant/ member shall first refer the complaint to the IGRC and/ or to arbitration mechanism provided by  the  Stock  Exchange  before  resorting  to  other  remedies  available  under  any other  law. For  the  removal  of  doubts,  it  is  clarified  that  the  sole  arbitrator  or  the panel  of  arbitrators,  as  the  case  may  be,  appointed  under  the  Stock  Exchange arbitration mechanism may consider any claim relating to any dispute between a stock  broker and client arising  out  of the transactions in  stock exchange, as per law, and shall always be deemed to have the competence to rule on its jurisdiction. A complainant/member, who is not satisfied with the recommendation of the IGRC shall  avail  the  arbitration  mechanism  of  the  Stock  Exchange  for  settlement  of complaints within three months from the date of IGRC recommendation”

• The time  period  of  three  months  mentioned  in  the  previous  sub-clause  for  filing arbitration shall be applicable only for the cases where the IGRC recommendation is being challenged. For any arbitration application received without going through IGRC mechanism, the above time period of three months shall not apply, and for such cases the limitation period for filing arbitration shall be governed by the law of limitation, i.e., The Limitation Act, 1963.”

Further the Circular advised Stock Exchanges and Depositories to:

• Make necessary amendments to the relevant bye-laws, rules and regulations, operational instructions, as the case may be, for the implementation of the above circular; and

• Bring the provisions of this circular to the notice of their constituents and also disseminate the same on the website.

Link to the Circular:

https://www.sebi.gov.in/legal/circulars/jun-2022/investor-redressal-grievance-mechanism_59521.html