Sebi eases investor grievance process

Investors to be compensated even before completion of arbitration process

Sebi has directed stock exchanges to provide for monetary compensation to investors even while the conciliation process is on. Investors with claims of upto Rs 10 lakh are now entitled to monetary compensation during the course of proceedings, said Sebi in a circular on its website. Such monetary compensations are to be made from the exchanges’ Investor Protection Fund (IPF), the circular added.

 

The Investor Grievance Redressal Mechanism of the exchanges has now been empowered to look into the admissibility of claim as well as ascertain the claim, in addition to the conciliation process. Once ascertained, the stock exchange would block the amount from the deposit of the concerned member. 
 

The member will then be a given time of seven days to inform the exchange whether the member would pursue arbitration proceedings. If the member fails to do so, the amount blocked will be released to the investors after seven days, the circular said.

 

The circular explained that the amount to be released through the IPF would be in claims favouring investors, wherein the member may or may not choose to set aside the arbitration amount. The amounts paid would be the positive difference between a percentage of the admissible claim and of the arbitration award.
 

Sebi has also slashed the appellate arbitration fees to Rs 10,000 from Rs 30,000 earlier.