SEBI Directs MIIs to Make Joint Efforts to Develop a Common ‘Online Dispute Resolution Portal’

Circular No. SEBI/HO/OIAE/OIAE_IAD-1/P/CIR/2023/131, Dated: 31.07.2023

SEBI has directed market infrastructure institutions (MIIs) to set up and operate a common Online Dispute Resolution (ODR) portal. The portal will harnesses online conciliation and online arbitration for the resolution of disputes arising in the Indian securities markets.

The MIIs i.e. stock exchanges, depositories and clearing corporations will have to make joint efforts to develop and operationalize the ODR Platform. All listed companies, specified intermediaries and regulated entities collectively called market participants in the securities market shall enrol on the ODR Portal.

The enrolment process shall also include executing electronic terms/agreements with MIIs and ODR Institutions. The facility to register market participants into the ODR portal by utilising the credentials used for the SEBI SCORES portal/SEBI Intermediary portal may also be provided.

All MIIs and ODR Institutions must ensure that the number of arbitrators and conciliators on the panel of the ODR Institutions is commensurate with the number of references of complaints/disputes received so that a conciliator/arbitrator/panel of arbitrators handle a reasonable number of references simultaneously and that all references are disposed of within the prescribed time.

Disputes between investors and listed companies, specified intermediaries and regulated entities would come under the ambit of ODR.

With regard to the initiation of the dispute resolution process, an investor/client is required to first take up his/her grievance with the market participant by lodging a complaint directly with the concerned market participant. If the grievance is not redressed satisfactorily, the investor/client may escalate the same through the SCORES portal.

After exhausting all available options for the resolution of the grievance, if the investor is still not satisfied with the outcome, he/she can initiate dispute resolution through the ODR Portal.

Alternatively, the investor/client can initiate dispute resolution through the ODR Portal if the grievance lodged with the concerned market participant was not satisfactorily resolved or at any stage of the subsequent escalations.

Moreover, concerned market participants can also initiate dispute resolution through the ODR platform after having given due notice of at least 15 calendar days to the investor/client for the resolution of the dispute which has not been satisfactorily resolved between them.

Further, the ODR Portal must have the necessary features and facilities to enrol the investor/client and the market participant and to file the complaint/dispute and to upload any documents or papers pertaining thereto. It must also have a facility to provide status updates on the complaint/dispute which would be obtained from the ODR Institutions.

The provisions of this circular will be implemented in phases –

The first phase shall include –

(a) Development of the ODR Portal, empanelment of ODR Institutions by the MIIs, and empanelment of conciliators and arbitrators by such ODR Institutions on or before August 1, 2023.

(b) Registration of Trading Members and Depository Participants on the ODR Portal by August 15, 2023 and

(c) Commencement of registering of complaints/disputes against brokers and depository participants and their resolution on and from August 16, 2023.

The second phase shall include –

(a) Registration of all other Market Participants on the ODR Portal by September 15, 2023

(b) Commencement of registering of complaints/disputes against all other Market Participants and their resolution on and from September 16, 2023.

Also, this circular supersedes the earlier circulars/directions issued by the Board relating to this till date.

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