The Securities and Exchange Board of India (SEBI) issued a circular on August 4, 2023, amending the guidelines for the online resolution of disputes in the Indian securities market. The same was done considering the public feedback received in this regard.
To streamline the dispute resolution mechanism in the Indian securities market, the Board came out with a circular on July 31, 2023, which provided for the setting up of a common Online Dispute Resolution (ODR) portal by Market Infrastructure Institutions (MIIs). The MIIs and Market Participants have been urged to provide a link to the said portal on their websites and mobile apps. As per the circular, the investor or client has to first approach the Market Participant for redressal of their grievances and if the outcome is not satisfactory, the SCORES portal can be availed of. In case the grievance is still not redressed, the investor or client can initiate dispute resolution through the ODR portal. Also, dispute resolution through the ODR portal can be initiated by the Market Participant provided that a 15-day notice is given to the investor or client.
Some of the changes made to the ODR framework are as follows: –
- The Market Participants will be deemed to have been enrolled on the ODR portal at the end of the timeline prescribed in the circular.
- One cannot initiate dispute resolution through the ODR portal during the moratorium period under the Insolvency and Bankruptcy Code, 2016 or if the liquidation or winding up process against the Market Participant has been initiated.
- If the dispute is not resolved through conciliation within 21 calendar days, and the Market Participant wishes to opt for online arbitration, then 100% of the admissible claim value must be deposited by the Market Participant with the MII and the applicable fee must be paid for online arbitration.
- Before challenging the award issued through online arbitration, the Market Participant must deposit the entire amount payable under the arbitral award, with the MII.