Detailed Analysis of Investor Grievance-Listed Entity perspective

A listed entity perspective to investor grievance mechanism:

Option 1:

Investors shall first take up their grievances for redressal with the entity concerned, through their designated persons/officials who handle issues relating to compliance and redressal of investor grievances.

Only if the grievance is not solved then ……

Option 2: - SEBI Complaint Redressal (SCORES) Platform.

• Centralized web-based complaint redressal facilitation platform.
• Launch: -2011 [SEBI Circular dated June 03, 2011]
• Investors need to first register themselves on scores to file a complaint. (listed entities are already registered)
• In addition, investors can approach the Online Dispute Resolution mechanism or have the option to approach legal forums including civil courts, consumer courts etc. at any point of time.

Grievances against: -

a.?? Listed entity.

b.? Registered intermediaries.

c.?? Market infrastructure institutions.

Time limit to file complaint on scores: -

First Review:

Complainant may choose to review when?

a.?? Complainant not satisfied with ATR within 15 calendar days. (or)

b.? No ATR filed by Listed entity within calendar 21 days.

c.?? by providing reasons for dissatisfaction.

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Review Notes: -

• By Stock exchange.
• It may seek clarification on ATR submitted from listed entity.
• Listed entity shall provide within such timelines as stock exchange stipulates.

Time period:

Stock exchange to submit revised ATR within 10 calendar days.

Second review: SEBI

If complainant still not satisfied, he may go for a second review by providing reasons for dissatisfaction.

Done by: SEBI.

Timeline: -Within 15 calendar days approach Sebi.

Reason: -

• Not satisfied with designated body (stock exchange)’s ATR

(or)

• ATR not submitted by stock exchange within 10 calendar days.

Sebi MAY take cognizance.

Note: -

• The second review Complaint shall be treated as ‘resolved’ or ‘disposed’ or ‘closed’ only when SEBI ‘disposes’ or ‘closes’ the Complaint in SCORES.
• Hence, mere filing of ATR with respect to SEBI review complaint will not mean that the SEBI review complaint is disposed.
• After examination/ SEBI review, the compliant is disposed on SCORES (With reasoned closure remarks and/ or advice to opt ODR, if not satisfied)
• Complainant also has option for other civil remedies.

Action for failure to redress: -

Violation of Regulation 13 (1) of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015

The Designated Stock Exchange (DSE) shall levy a fine of ? 1000 per day per complaint on the listed company.??

[Ref: - SEBI circular no. SEBI/HO/CFD/CMD/CIR/P/ 2020/ 12 dated January 22, 2020.]

# Action for failure to redress investor complaints by listed companies: -

Notes:

1. Stock exchange may deviate from above procedures and actions if:

a.?? Found necessary.

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b.?? Recorded the reasons in writing.

2.Stock exchange duty:

3. In case the complainant opts for Online Dispute Resolution mechanism or other appropriate civil remedies while the complaint is pending on SCORES, the complaint shall be treated as disposed on SCORES.

# Timelines for handling of complaints and actions in case of non-compliances.

#Complaints not dealt through SCORES: -

Complaints against:

? Unlisted/delisted companies.

? Companies on Dissemination Board of Stock Exchanges.

? Complaints relating to cases pending in a court or subject matter of quasi-judicial proceedings.

??disputes pending with Online Dispute Resolution mechanism.

? Complaints falling under the purview of other regulatory bodies like RBI, IRDA, PFRDA etc.

? complaints falling under the purview of other ministries.

? A company under resolution under Insolvency and Bankruptcy Code, 2016.

?companies where the name of company is struck off from Register of Companies (ROC).

? vanishing company as published by MCA.

? Liquidated Companies

? companies under liquidation.

?? Complaints which are in the nature of market intelligence.

(note: - Fines are also levied against companies which are suspended from trading on stock exchanges)

Further ODR shall be explained in upcoming articles !

Just on a side note:-

If you are interested in receiving the updates on latest amendments, case laws and articles on Company and securities laws, you can join my Broadcast group on WhatsApp:

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With warm regards,

Keep Smiling,

Saeed Shaikh.

FOOTNOTES

1.?? regulation 13 of LODR.

2.? SEBI/HO/CFD/CMD/CIR/P/2020/12 dated January 22, 2020

3.? SEBI (Facilitation of Grievance Redressal Mechanism) (Amendment) Regulations, 2023

4.? SEBI vide circular on September 20, 2023.

5.? SEBI vide circular (SEBI/HO/OIAE/ IGRD/CIR /P/ 2023/183 on December 01, 2023