Got a grievance with your stock broker, MF house? SEBI is looking to make redressal easy

• SEBI is looking to reduce timelines, introducing auto-routing of complaints to concerned entities.
  
• The market regulator is looking to link its Sebi Complaint Redress System (SCORES) with the Online Dispute Resolution Mechanism.
  
• There will also be two levels of review —- first, by the designated body, and the second by SEBI itself if the investor is dissatisfied.
  

The Indian market is on a bull run and retail investors are thronging to Dalal Street. Now, to make life easier for investors in stock markets, mutual funds etc. the markets regulator is moving to strengthen the grievance handling mechanism.

In its board meeting held on Wednesday, the Securities and Exchange Commission of India (SEBI) has cleared various measures like linking Sebi Complaint Redress System (SCORES) with the Online Dispute Resolution Mechanism for complaints relating to all regulated entities.

SEBI will also look at reducing timelines, introducing auto-routing of the complaint to concerned regulated entities, and auto-escalation of complaints in case of non-adherence to the prescribed timelines by the regulated entity.

Two-levels of review

SEBI said it would also provide two levels of review —- the first would be by the designated body if the investor is dissatisfied with the resolution provided by the regulated entity concerned.

The second review would be done by SEBI itself if the investor is still dissatisfied after the first review.

Linking SCORES with the Online Dispute Resolution (ODR) platform would provide an additional option for investors of all regulated entities.

The Reserve Bank of India too has taken a similar approach to address growing customer complaints against banks. It had set up a committee which came up with a proposal to set up a common complaints portal – that’s brand agnostic — where customers can lodge their grievances. The portal would then allocate the complaint to the respective RE at the back-end.

Investors vs regulated entities

In the last few years, many scandals relating to regulated entities have rocked the system. Investors have been hoodwinked by fund houses and brokers. One similar case is that of Karvy Stock Brokers which has pledged the shares that belonged to its clients without consent — an incident that worried many retail investors two years back.

Yet another much more recent issue is related to IIFL Securities wherein SEBI stopped it from accepting new clients. Its order was overturned by the Securities Appellate Tribunal (SAT). As per news reports, the regulator’s investigation said that money was routinely moved from client bank accounts to the entity’s own accounts.

(With inputs from PTI)