The Securities and Exchange Board of India has proposed modifications in the investor grievance redressal mechanism, to facilitate dispute resolution and arbitration online on an end-to-end basis.
The proposed changes include doing away with the appellate arbitration system administered by market infrastructure institutions (MIIs), and reorganising the Investor Grievance Redressal Committee (IGRC) into a panel of mediators.
"To reduce costs for the parties, ease/eliminate the coordination issues in forming a panel and enable availability of a higher number of arbitrators for resolution of matters, it is proposed that all matters, irrespective of the amount of claim, be dealt with by a sole arbitrator, and accordingly, the requirement of a panel of arbitrators will be discontinued," said Sebi.
Currently, a sole arbitrator is appointed under the MII-administered arbitration mechanism for matters involving claims of up to Rs 25 lakh, while a panel of three arbitrators is appointed for higher claims.In a consultation paper floated on December 19, Sebi has suggested that the existing partially online mode can be enhanced to enable end-to-end online experience for investors and intermediaries.
The regulator has suggested the use of tools like multimodal communication between the parties, automatic case-status updates, easy scheduling and appointment of arbitrators/mediators, etc.
"There is scope to make the processes followed by the MIIs themselves more efficient and accessible, especially given the improvement in grievance redressal processes worldwide post the pandemic," said the capital markets regulator.
Sebi has also recommended that the mechanism adopted by MIIs be extended to other specified securities market intermediaries which currently follow varying modes of grievance resolution.
-- Khushboo Tiwari/Business Standard