Sebi Assigns Monitoring Bodies To Expedite Investors’ Grievance Redressal Under SCORES; Learn More

The Securities and Exchanges Board of India (SEBI), on September 20, 2023, introduced a new process to speed up investors’ grievance redressal process through its online platform SCORES. It has set a minimum fine of Rs 1,000 if the complaints take more than 60 days to resolve. It has also set up monitoring bodies to supervise how the complaints are being addressed.

SEBI SCORES Background & What Changed

Sebi’s decision to revamp SCORES was prompted by its August 16, 2023, amendment that seeks to expedite the grievance handling process in the securities market through an automated routing and complaint escalation mechanism. According to its new circular, the changes allow the designated bodies to monitor the process for quick grievance redressal.

SCORES help the investors’ unresolved complaints against listed companies, registered intermediaries, or market infrastructure institutions. The new circular empowers designated bodies like the stock exchanges, the Association of Investment Bankers of India, the Association of Mutual Funds in India (AMFI), and the BSE Administration & Supervision Ltd. (BASL) to oversee complaints pertaining to their specific areas to ensure speedy resolution.

For instance, the stock exchanges will oversee complaints against listed companies and AMFI against mutual funds. Let’s first understand what SCORES is.

Sebi Complaints Redress System (SCORES)

SCORES is a web-based centralised grievance redressal system initiated by Sebi in 2011. It simplifies the process for investors to file and monitor complaints and maintain a digital record of complaint statuses. In August 2023 alone, Sebi resolved 3,736 complaints through SCORES.

Investors interested in filing a complaint on SCORES must first register on www.scores.gov.in. During registration, they need to provide essential details, such as their name, Permanent Account Number (PAN), contact information, and email address. Upon successful registration, a unique user ID and password are generated and communicated through an email to the complainant.

New Process For Grievance Redressal

Complaint Submission and Resolution by Entities: Initially, investors must approach the entity they have a grievance against through designated persons or officials responsible for compliance and redressal. Then, they may approach SCORES. When investors file complaints through the SCORES, entities (listed companies, brokers, MFs, etc.) must address and resolve them within 21 calendar days.

Complaints submitted through SCORES are automatically forwarded to the respective entities for resolution, and Action Taken Reports (ATRs) must be submitted within 21 days. Regulatory bodies designated for specific areas oversee the ATR submission by entities under their jurisdiction, ensuring the quality of grievance resolution.

First Review of Complaints: Investors can request a review of the resolution provided by the entity within 15 calendar days of receiving the ATR. If a complainant remains dissatisfied or if the entity fails to submit the ATR within the specified timeframe, designated regulatory bodies initiate the first review. These bodies can seek clarification on the ATR and establish deadlines for revised ATR submission. The designated body will upload ATR on SCORES within 10 days, which will be automatically routed to the complainant through SCORES.

Second Review of Complaints: Investors can request a second review within 15 calendar days of receiving the ATR from the designated regulatory body. If the complainant remains unsatisfied or the ATR submission faces delays, Sebi intervenes for a second review. The concerned entity must promptly submit a revised ATR to Sebi through SCORES.

Resorting to Online Dispute Resolution (ODR) and Civil Remedies: Investors can explore Online Dispute Resolution or other civil remedies if they are still dissatisfied at any time. If a complaint is pending on SCORES and the complainant opts for ODR or other civil remedies, the complaint is considered resolved on SCORES.

If a listed company fails to resolve a complaint within 60 days, they face a fine of Rs 1,000 per day per complaint. The Entities should also submit the Action Taken Report (“ATR”) to Sebi within 21 calendar days of receiving the complaint.

These new provisions for processing investor grievances and the framework for monitoring and handling complaints through Designated Bodies will come into effect on December 4, 2023.