Sebi moots proposal to strengthen investor grievance mechanism SCORES

Capital markets regulator Sebi is looking to strengthen the investor grievance handling process through the SCORES system and integrate the same with the online dispute resolution mechanism.

The proposal is aimed at making the entire redressal process of grievances in the securities market comprehensive by providing an end-to-end solution and the process more efficient and faster by reducing timelines and introducing auto-routing and auto-escalation.

Also, the suggestion has been provided for two levels that the investor can opt for, plus the option for referral to the online dispute resolution (ODR) mechanism recently approved by Sebi.

In its consultation paper on Friday, Sebi suggested that complaints about market price manipulation, insider trading and accounting manipulation by listed companies that are currently being auto-closed should be excluded from the SCORES platform and a separate portal for market intelligence should be created for this purpose.

In case the investors lodge complaints like market intelligence on SCORES, such types of complaints should be closed and routed to the market intelligence portal.

"A separate portal for collection of market intelligence will help in distinguishing between investor grievances and intelligence inputs, with an independent focus on each," Sebi said.

The Securities and Exchange Board of India (Sebi) sought comments from the public on the proposals till June 3.

To further strengthen the investor grievance redressal process, the capital markets regulator has proposed that SCORES should be redesigned as a platform for investors to seek timely redressal of their grievances from entities directly.

In case the investors are dissatisfied with the redressal provided by entities, an opportunity for two levels of review be given, first by first-level regulators (FLR) such as BASL or trade bodies and the second stage by Sebi. Further, if the complainant is not satisfied with the same, an option should be given to approach the ODR platform.

Under the proposal, Sebi said that the routing of complaints from the investors to the concerned entity and the first-level regulator would be automated eliminating the time lapses in the flow of complaints.

"The automatic review of complaints at two stages (first stage by FLRs/trade bodies and second stage by Sebi) if ATR is not submitted within the stipulated time the period will compel the entities/FLRs to expedite the redressal of investor grievances within stipulated times," Sebi said.

According to Sebi, linkage of the SCORES portal with the ODR platform wherein the complainant who is still not satisfied with the resolution provided on SCORES can approach ODR will create further options for the complainant.

SCORES was launched by Sebi in June 2011 to enable investors to lodge and follow up on their complaints and track the status of redressal of such complaints in the ODR mechanism, an online platform is envisaged through which the investor can approach any market infrastructure institution (MII) to lodge their request for dispute resolution and the request will be auto-assigned to an MII ODR platform.