Ahead of SCORES revamp on April 1, complaint resolution shows an uptick

Number of complaints dipped 14 per cent month-on-month

The market regulator Securities and Exchange Board of India (Sebi) has resolved more investor complaints ahead of a revamp of its dispute resolution portal.

Sebi closed 4,471 complaints in February – the latest month for which data is available, a considerable increase over the 3,900-odd complaints closed in the previous month.

Complaints pertaining to and against Sebi-registered companies, related intermediaries and the securities market are registered at the Sebi Complaints Redress System (SCORES) portal – the market regulator’s grievance redressal forum. The online portal was launched in 2011 with the idea of making registration and tracking of investor complaints convenient and reducing the "possibility of loss, damage or misdirection of the complaints."

Thirteen years later, the portal is set to be re-launched as SCORES 2.0 to fully automate the process of grievance redressal. The move is to simplify the digitised process of complaint registration and help democratise dispute resolution for investors, said Madhabi Puri, chairperson of Sebi at an event this month.

Despite this increase in resolution, the pendency of cases continues to persist mainly because of the rise in new complaints. A total of 5,371 complaints were pending at the beginning of February. Of these complaints, just seven have been pending for over three months, of which six were against venture capital funds and one against an alternative investment fund. Details of individual complaints were not available on the website.

The Securities Appellate Tribunal (SAT), which hears appeals against Sebi decisions, criticised the functioning of the portal in an August 2023 order. It noted that the portal forwards complaints about intermediaries to them directly, forwards their reply to the complainant, and then marks the complaint as closed. The tribunal noted that the regulator is required to check if any violation has occurred and 'direct the company, registered intermediary or recognised market Infrastructure Institution to sort out the complaint or initiate proceedings for violation of the securities laws.'

The average resolution time in February was 36 days compared to 35 days in January. It is still lower than the November and December data, which shows average resolution stretching over 40 days. The average resolution time in 2023 was 35 days. (chart 1)

As many as 4,761 complaints were received by the regulator in February, a 14 per cent dip compared to those filed in the month of January when complaints saw a massive surge.

In the same month last year, the regulator received 2,321 complaints, the lowest figure since October 2021. (Chart 2)