Sebi's guide on effective grievance redressal

PTI Posted online: Monday, Dec 09, 2013 at 0000 hrs
Mumbai : Securities and Exchange Board of India (Sebi) has issued a detailed advisory for general public on how they can take up their grievances on various issues including investment frauds, manipulative activities and other irregularities. While providing a guidance to general public on effective ways to redress their grievances, Sebi in this advisory has also highlighted cases where repeated complaints are received despite the matter being resolved from Sebi’s side.

“Sebi has been receiving complaints on SCORES (Sebi’s online complaint redressal platform) and also getting regular emails regarding complaints. These complaints are examined and are taken up with respective companies or intermediaries for redressal,” Sebi said in the advisory.

As per the process, Sebi takes action on a complaint based on the action taken reports given by companies and other regulated entities and under the prescribed regulations.

However, Sebi said: “There are some complaints which are addressed as per the existing norms but these complaints are continuously referred back to Sebi despite having been addressed such as by advising complainants to approach appropriate authorities or forums such as civil and consumer courts, arbitration mechanism, or to other regulators, etc.”

Giving examples of such complaints, Sebi said it has repeatedly recieved grievances on instances such as those against a broker for non-payment of brokerage commission, dividend, office rent, referral charges and other expenses due to him, among others. Another complainant, Sebi said someone alleged that on a particular day, before the close of a trading session, incorrect news was flashed on TV regarding the quarterly results of a firm.

Guiding the public, Sebi has said that complaints such as those against unlisted, delisted, wound up, liquidated, sick firms and those cases which are sub-judice, do not fall under its purview. Sebi also said it does not handle complaints that fall under the purview of other regulatory bodies such as RBI, IRDA, PFRDA, CCI as well as those that come under ministries like corporate affairs ministry.

According to Sebi it only handles complaints pertaining to capital market participants like listed companies, stock brokers, stock exchanges, mutual funds, among others. Besides, Sebi said it does not consider matters as complaints if they seek explanation for non-trading of shares or illiquidity of shares, make allegations without supporting documents as well as those related to disputes arising out of private agreement with companies and intermediaries.

Sebi noted that it does face various kinds of limitations while resolving the complaints such as in cases where the entity against whom the grievance has been filed denies wrongdoing, and it remains unclear as to who is wrong or whether any wrongdoing occurred at all.

“If this happens, Sebi cannot act as a judge or an arbitrator and force the entity to resolve the complaint. Securities laws and other laws provide important legal rights and remedies if an investor has suffered wrongdoing. On their own, investors can also seek to resolve their complaint through the courts, consumer courts, or arbitration,” it said.