Investor Grievances and Arbitration — the three-tier redressal ladder

Where this chapter sits

Chapter 7 carries 10% of the paper. It is almost entirely a chapter of timelines and thresholds — how many days at each stage, and how much money at each level.

The exam: 120 minutes, 100 marks, 50% to pass, 25% negative marking. Nowhere does the negative marking bite harder than here: 21 days, 15 days, 10 days, 30 days, 5 days, 7 days all appear, attached to different stages. Learn the ladder as a sequence, not as isolated facts.

Why the chapter exists

Investors are the backbone of the securities market. Protection of the interests of investors is of paramount importance for the intermediaries, stock exchanges and the regulators.

However, there may be occasions when the investors have grievances against (a) an intermediary/broking firm through which it is carrying out the transactions, or (b) against the company of which it is a shareholder.

Investor grievance is handled at the trading member level, stock exchange level and the regulator level.

Level 1 — the trading member

All the trading firms have a designated cell/person for redressing investor grievances. When a complaint is filed by the investor, the matter has to be resolved at the branch level or the firm level depending upon the nature of the complaint.

All the registered brokers shall designate an e-mail ID of the grievance redressal division/compliance officer exclusively for the purpose of registering complaints by investors. The broker shall also display the email ID and other relevant details prominently on their websites and in the various materials/pamphlets/advertisement campaigns.

Further, the offices of all stock brokers (and their registered authorized persons) shall prominently display basic information about the grievance redressal mechanism available to investors — the escalation path from compliance officer, to CEO/Partner/Proprietor, to the concerned Stock Exchange or Depository, and finally to SEBI at SCORES, together with SEBI's toll free helpline at 1800 22 7575 / 1800 266 7575.

The core service standard: the stock broker shall endeavour to redress investor grievances promptly within the time specified — currently within 21 calendar days from the receipt of complaint — by SEBI/Exchanges. The stock broker shall maintain records regarding investor grievances received by it and redressal of such grievances.

The Investor Charter for Stock Brokers

SEBI has prepared an Investor Charter for Stock Brokers inter alia detailing the services provided to Investors, Rights of Investors, various activities of Stock Brokers with timelines, DOs and DON'Ts for Investors and Grievance Redressal Mechanism.

Stock Exchanges are directed to advise Stock Brokers to bring the Investor Charter to the notice of their clients (existing as well as new) by disclosing it on their websites, making it available at prominent places in the office, providing a copy as part of the account opening kit, and through e-mails or letters.

And on transparency of complaints: all the Stock Brokers shall disclose on their respective websites the data on complaints received against them or against issues dealt by them and redressal thereof, latest by the seventh of the succeeding month, as per the SEBI provided format.

Separately, under the SEBI (Intermediaries) Regulations 2008, the stock broker shall at the end of each quarter of a financial year ending on 31st March upload information about the number of investor grievances received, redressed and those remaining unresolved beyond three months of the receipt thereof, on the website.

The Investor Charter timelines

Level 2 and 3 — the exchange and SEBI

In case the complainant or the aggrieved investor is unsatisfied with the redressal process of the trading member, then the investor can take his grievance to the stock exchange or SEBI.

SCORES

SEBI handles investor grievances through a system called SEBI Complaints Redress System (SCORES). SCORES is a web based centralized system to capture investor complaints against listed companies and registered intermediaries and is available 24x7.

Its salient features:

• Centralized database of all complaints.
• User friendly interface.
• Effective redressal mechanism.
• Feed based system.
• Online movement of complaints to the concerned entities.
• Online upload of Action Taken Reports by the concerned entities.
• Realtime tracking of status of complaints by investors.

When a complaint is lodged on SCORES, an email acknowledgement is generated for reference and tracking. If an investor submits a manual complaint, the same is digitized by SEBI and uploaded on SCORES, after which follow-up actions of the complaint are done in electronic form only.

Help is available: investors may contact the Investor Associations (IAs) recognized by SEBI for any assistance in filing complaints on SCORES, and may also seek assistance from SEBI's toll free helpline numbers.

The mandatory first step. SEBI found that investor grievances can be resolved faster if the grievance is taken up directly with the entity at the first instance. Accordingly, it is now mandatory for investors to first take up their grievances for redressal with the entity concerned, through their designated persons/officials. In case the entity concerned fails to redress the complaint within the timeline provided, the investor may then file their complaint in SCORES.

The revised SCORES framework — the timelines

How the flow works:

• Complaints lodged on SCORES against any Entity shall be automatically forwarded to the concerned Entity through SCORES for resolution and submission of Action Taken Report. The ATR of the entity will be automatically routed to the complainant.
• The Designated Body — for a Stock broker, the Stock Exchange is the Designated Body — shall ensure that the concerned Entity submits the ATRs within the stipulated time of 21 calendar days.
• The Designated Body may seek clarification on the ATR submitted by the Entity for the first review.
• In case the complainant is satisfied with the ATR provided by the Designated Body, or does not choose to review within 15 calendar days, the Complaint shall be disposed on SCORES.
• In case the complainant is not satisfied, or the Designated Body has not submitted the ATR within 10 calendar days, SEBI may take cognizance of the Complaint for second review.
• 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 a SEBI review complaint will not mean that the SEBI review complaint is disposed.

The one-year limitation

Presently, the limitation period for filing an arbitration reference with stock exchanges is three years. In line with the same, and in order to enhance ease, speed and accuracy in redressal of investor grievance, the investor may lodge a complaint on SCORES within one year from the date of cause of action where:

• The investor has approached the listed company or registered intermediary for redressal of the complaint, and
• The concerned listed company or registered intermediary rejected the complaint, or
• The complainant does not receive any communication from the listed company or intermediary concerned, or
• The complainant is not satisfied with the reply given to him or redressal action taken.

SEBI reserves its right to reject a complaint lodged on SCORES if the date of cause of action is more than one year old and/or the complainant has not taken up the complaint with the concerned entity prior to the said date.

And a jurisdictional rule to remember: investors can approach the Online Dispute Resolution mechanism or other appropriate civil remedies at any point of time. In case the complainant opts for ODR or other appropriate civil remedies while the complaint is pending on SCORES, the complaint shall be treated as disposed on SCORES.

What SCORES will not handle

Types of complaints not dealt with through SCORES:

• Complaints against companies which are unlisted/delisted, in the dissemination board of Stock Exchanges.
• Complaints that are sub-judice, i.e. relating to cases under consideration by a court of law or quasi-judicial proceedings.
• Complaints falling under the purview of other regulatory bodies — RBI, IRDAI, PFRDA, CCI — or other ministries such as MCA.
• Complaints against a sick company or a company where a moratorium order is passed in winding up/insolvency proceedings.
• Complaints against companies where the name is struck off from RoC, or a vanishing company as per the list published by MCA.
• Companies under liquidation / BIFR.
• Disputes pending with the ODR mechanism under the aegis of MIIs.

Matters that cannot be considered as complaints at all:

• Complaints not pertaining to investment in the securities market.
• Anonymous complaints (except whistleblower complaints).
• Incomplete or un-specific complaints.
• Allegations without supporting documents.
• Suggestions or seeking guidance/explanation.
• Not being satisfied with the trading price of shares.
• Non-listing of shares of a private offer.
• Disputes arising out of a private agreement with companies/intermediaries.
• Matters involving fake/forged documents.
• Complaints on matters not in SEBI's purview.
• Complaints about any unregistered or unregulated activity.

A one-time review option is also available: a complainant, if not satisfied with the extent of redressal by the concerned listed company/intermediary/MII, opts for review of the extent of the redressal within 15 days from the date of closure of the complaint on SCORES. Thereafter, the complaint shall be escalated to the supervising official of the dealing officer of SEBI.

And all Recognized Stock Exchanges, Depositories and Clearing Corporations are advised to display on the home page of their websites and mobile apps a link/option to lodge complaint with them directly and a link to the SCORES website / link to download the SCORES mobile app.

SCORES 2.0

SEBI has launched the new version of the SEBI Complaint Redress System (SCORES 2.0) with effect from April 01, 2024. Investors can lodge complaints only through the new version from that date.

Its salient features:

• Reduced and uniform timelines for redressal of investor complaints across the Securities Market, i.e. 21 calendar days from date of receipt of complaint.
• Introduction of auto-routing of complaints to the concerned regulated entity so as to eliminate time lapses in the flow of complaints.
• Monitoring of the timely redressal of the investors' complaints by the Designated Bodies.
• Two levels of review: first review by the Designated Body if the investor is dissatisfied with the resolution provided by the concerned regulated entity; second review by SEBI if the investor is still dissatisfied.
• Introduction of auto-escalation of a complaint to the next level in case of non-adherence to the prescribed timelines by the regulated entity or the Designated Body.
• Integration with the KYC Registration Agency database for easy registration of the investor on to SCORES.

Investor Service Centres

SEBI advised all stock exchanges to open or maintain at least one Investor Service Centre for the benefit of investors, providing counselling service and certain basic minimum facilities.

Where they must be: in metro cities — New Delhi, Mumbai, Chennai and Kolkata — and stock exchanges having nationwide terminals shall open ISCs additionally in Ahmedabad, Hyderabad, Kanpur, Indore, Bangalore, Pune, Jaipur, Ghaziabad, Lucknow, Gurgaon, Patna and Vadodara.

The ISCs can be set up either by one stock exchange or jointly by two or more stock exchanges as per their mutual agreement.

Minimum facilities:

• Four financial daily newspapers with at least one in the regional language of the place where the ISC is situated.
• A dedicated desktop or laptop with internet connectivity to access public-domain information and SEBI's and the stock exchange's grievance redressal portals.
• Facilities for receiving investor complaints in both physical and electronic form.
• Facilitation desks at all ISCs to assist the investors in the dispute resolution process.
• Arbitration and appellate arbitration facility at all ISCs including video-calling facility to investors for attending their online arbitration or Grievance Redressal meetings.
• A meeting room for at least 5 to 6 persons and additional sitting space for at least 5 to 6 persons.
• A library of relevant laws, common booklets, educational materials — with physical copies provided at a minimal cost on request.
• A register or database of visitors for future correspondence.
• Other infrastructure such as a telephone, photocopier, printer, scanner, internet access and furniture.

SEBI has directed Stock Exchanges to ensure that ISC officials are trained in market operations, grievance resolution, and the SCORES platform to effectively guide retail participants.

Four ways to lodge a complaint with an Exchange: through SCORES 2.0 (with first review by the Exchange and second review by SEBI) · the Exchange's own web portal · emails to designated email IDs · through SMARTODR.

Online Dispute Resolution — SMART ODR

SEBI has notified and put in place an "Online Dispute Resolution process" by establishing a common Online Dispute Resolution Portal. The ODR portal harnesses online conciliation and online arbitration for resolution arising in the securities markets, ensuring investors have access to a streamlined process to resolve grievances against listed companies, intermediaries, and market infrastructure institutions.

Who is covered

Disputes between Investors/Clients and listed companies (including their registrar and share transfer agents) or any of the specified intermediaries/regulated entities in the securities market, arising out of the latter's activities in the securities market, are resolved through online conciliation and/or online arbitration.

Either side may also refer any unresolved issue of service requests or service-related complaints — which include non-receipt/delay of account statement, non-receipt/delay of bills, closure of account/branch, technological issues, shifting/closure of branch without intimation, improper service by staff, freezing of account, alleged debit in trading account, contact person not available, demat account transferred without permission.

The specified intermediaries and regulated entities against whom the ODR process may be invoked:

• AIF Fund managers.
• Banker to an Issue and Self-Certified Syndicate Banks.
• CIS Collective Investment management company.
• Commodities Clearing Corporations.
• Depository Participants.
• Investment Advisors.
• InvIT Investment Managers.
• Merchant Bankers.
• Mutual Fund AMCs.
• Portfolio Managers.
• Registrars and Share Transfer Agents.
• REIT Managers.
• Research Analysts.
• Stock brokers (including Online Bond Platforms and Online Bond Platform Providers).

Institutional or corporate clients get a choice. Disputes between them and specified intermediaries may be resolved at the option of the institutional or corporate client either in accordance with this circular by harnessing online conciliation and/or online arbitration, or by harnessing any independent institutional mediation, independent institutional conciliation and/or independent arbitration institution in India. The seat and venue shall be in India and can be conducted online.

Disputes between MIIs and their constituents which are contractual in nature shall be included in the framework at a future date, while expressly excluding disputes/appeals/reviews/challenges pertaining to the regulatory, enforcement role and roles of similar nature played by MIIs.

Empanelment and the portal

An MII shall empanel one or more ODR Institutions as a service provider. MII should ensure that the primary/first ODR Institution to be empanelled with it is not empanelled as the primary/first ODR Institution with any other MII.

An MII shall collect requisite information including copies of registration certificate, memorandum and articles of association, rules governing conciliation and arbitration, PAN, Legal Entity Identifier number, composition of its board of directors, governing bodies and advisory councils, details of its shareholders and investors, and list of its authorized officials/signatories.

An ODR Institution empanelled by an MII should be or become a member of an association/trade body having as its members MII empanelled ODR Institutions for the Indian Securities Market.

On the portal: the MIIs shall, in consultation with their empanelled ODR Institutions, establish and operate a common Online Dispute Resolution Portal, entering into an agreement amongst themselves outlining the nature of their responsibilities, the cost of development, operating, upgradation, maintenance and for inspection and/or audit.

SEBI shall from time to time undertake inspection in order to ensure proper functioning of the ODR Portal.

Each MII will identify and empanel one or more independent ODR Institutions capable of undertaking time-bound online conciliation and/or online arbitration in accordance with the Arbitration and Conciliation Act, 1996, with duly qualified conciliators and arbitrators. The ODR Portal shall establish due connectivity with the SEBI SCORES portal / SEBI Intermediary portal.

All Market participants shall enrol on the ODR Portal within the timelines specified, and shall be deemed to have been enrolled at the end of such specified timeline.

Initiating the process

An investor/client shall first take up his grievance with the Market Participant by lodging a complaint directly with the concerned Market Participant. If the grievance is not redressed satisfactorily, the investor may escalate the same through the SCORES Portal. After exhausting these options, if the investor is still not satisfied, he can initiate dispute resolution through the ODR Portal.

Alternatively, the investor could 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.

But there is one prerequisite that cannot be skipped: one prerequisite to file a complaint in SMART ODR is that the investor has to first take up the complaint with the intermediaries before opting for ODR.

On receipt: upon receipt of complaint on the SMARTODR portal, the relevant MII will review the matter and endeavour to resolve the matter between the Market Participant and investor within 21 days. If the matter could not be amicably resolved, then the matter shall be referred for conciliation.

The market participant may also initiate: the concerned Market Participant may also initiate dispute resolution through the ODR Portal after having given due notice of at least 15 calendar days to the investor/client.

Allocation: a complaint/dispute initiated through the ODR Portal will be referred to an ODR Institution empanelled by a MII, and the allocation system on a market-wide basis will be a round-robin system.

Documents a claimant may need to submit:

• A statement explaining the dispute and the nature of transactions, separating delivery-based and squared-off transactions.
• Contract notes.
• Bills issued/received.
• A copy of the accounts statement given by the broker.
• Documents pertaining to receipt/delivery of shares.
• Any other supporting documents.
• An accurate list of the documents produced.
• PAN/GIR No.
• A certified copy of the balance sheet showing the dues.
• A copy of acknowledgement of the latest Income Tax Return.
• Margin statement.
• Member constituent agreement.
• Risk disclosure document.

Conciliation

The ODR Institution that receives the reference shall appoint a sole independent and neutral conciliator from its panel, who shall have relevant qualifications or expertise and should not be connected with or linked to any disputing party.

The timings:

• The ODR Institution appoints the conciliator within 5 days of receipt of reference of the complaint/dispute.
• The conciliator shall conduct one or more meetings for the disputing parties to reach an amicable and consensual resolution within 21 calendar days from the date of appointment.
• Unless extended for a maximum period of 10 calendar days by consent of the disputing parties, to be recorded in writing/electronically.

If successful: the same shall be concluded by a duly executed settlement agreement between the disputing parties, executed and stamped through an online mode.

If not resolved within the 21 calendar days (or the extended 10 days):

• The conciliator should ascertain the admissible claim value of the complaint/dispute that the conciliator determines is payable to the investor/client, and notify the disputing parties as well as the ODR Institution and the MII.
• An investor/client may pursue online arbitration — administered by the ODR Institution which also facilitated the conciliation — on or after the conclusion of a conciliation process.
• In case the Market Participant wishes to pursue online arbitration, then the Market Participant must deposit 100% of the admissible claim value with the relevant MII prior to initiation of the online arbitration.

If the Market Participant fails to deposit, they may not initiate online arbitration, and may also face consequences as determined by the Stock Exchange.

Interim relief for the investor: on an application made by the investor/client to the relevant MII, the MII may, from the deposit received, release such amount to the investor/client not exceeding ₹5,00,000 (Rupees Five lakhs), or such sum as may be specified. On or before release, the MII shall obtain appropriate undertaking/indemnity/security from the investor/client to ensure return of the amount so released, in case the arbitration proceedings are decided against the investor/client.

Fees: the fees for the conciliation process may be borne by the MIIs and will be recoverable by them from the concerned Market Participant against whom the complaint is raised. Such fees shall be borne directly by the concerned Market Participant if it is initiating the dispute process. And crucially: the Market Participant shall not shift the incidence of such fees to the investor/client at any time.

Late fees: initiation of the conciliation process after six months from the date of transaction/dispute arising will require payment of ₹1,000 by the initiator of the complaint/dispute — whether such initiator be the investor/client or the Market Participant.

Arbitration

Arbitration, which is a quasi-judicial process, is an alternate dispute resolution mechanism prescribed under the Arbitration and Conciliation Act, 1996.

If conciliation is unsuccessful, an investor may initiate online arbitration by paying the necessary fees, and the stock broker is required to participate.

The deposit rules:

• The stock broker must deposit 100% of the admissible claim value with the relevant MII and pay all applicable fees within 10 days of the investor starting arbitration.
• If the broker initiates arbitration, they must inform the ODR Institution within 10 days of conciliation ending and deposit the full claim value within an additional 5 days.
• Non-compliance can result in stringent action against the broker.

How many arbitrators:

How the arbitration is conducted:

• Where the value of claim and/or counter-claim exceeds ₹1,00,000, the Sole Arbitrator or Tribunal shall conduct one or more hearings and pass the arbitral award within 30 calendar days of the appointment.
• Where the value is ₹1,00,000 or below, the Sole Arbitrator shall conduct a document-only arbitration process and pass the arbitral award within 30 calendar days. However, the arbitrator, for reasons to be recorded, may grant a hearing to the parties.
• For disputes exceeding ₹1,00,000, the arbitrator is at liberty to extend the time by a further period of 30 calendar days, for reasons to be recorded, when the matter requires detailed consideration.
• The arbitrator may, having regard to the nature of the claim, provide interim relief, for reasons to be recorded, after affording a hearing.
• The parties may make an application under the relevant section of the Arbitration and Conciliation Act, 1996 for correction/rectification of the award.
• If parties do not provide any representation in the arbitral proceedings, the arbitrator may pass an ex-parte order after giving a notice of 7 calendar days to the non-cooperative party.

After the award:

• Payment by the Market Participant shall be made within 15 calendar days from the date of the arbitral award, unless the award requires payment sooner.
• MII shall provide necessary assistance to the investor/client for enforcement of the arbitral award.
• The party against whom the order has been passed will be required to submit its intention to challenge the award under Section 34 of the Arbitration Act within 7 calendar days in the ODR Portal.
• In the course of such a challenge, if a stay is not granted within 3 months from the date of receipt of the award, complete adherence to the terms of the arbitral award must be done.
• If the Market Participant wishes to challenge an arbitral award, then it must deposit 100% of the amounts payable in terms of the arbitral award with the relevant MII prior to initiation of the challenge.
• The MII shall also monitor the due compliance by the Market Participant with the terms of the arbitral award/judgement of the appellate forum.

Arbitration late fees: arbitration initiated after one month of failure of conciliation and up to six months — the fees payable would be double the non-refundable fees. Arbitration initiated after six months by a Market Participant will require payment of an additional fee of 50% of the fees, applicable per additional month of delay, on a non-refundable basis.

Seat and venue

The ODR Institutions shall conduct conciliation and arbitration in the online mode, enabling online/audio-video participation. The investor/client may also participate by accessing the facilities of Investor Service Centres operated by any of the MIIs.

The venue and seat of the online proceedings shall be deemed to be the place:

• For disputes between an investor/client and listed companies or specified intermediaries: where the investor resides permanently, or where the investor is not an individual, the place where it is registered in India or has its principal place of business in India, as provided in the relevant KYC documents.
• For disputes between institutional or corporate clients and specified intermediaries: where the institutional or corporate client is registered in India or has its principal place of business in India; if not registered in India or without a principal place of business in India, then the place where the specified intermediary is registered or has its principal place of business in India; or such court of competent jurisdiction in India as they may agree upon.

Market participants' responsibilities

All agreements, contractual frameworks or relationships entered into by Market Participants with investors/clients — presently existing or entered into hereafter — shall stand amended or be deemed to incorporate provision to the effect that the parties agree to undertake online conciliation and/or online arbitration by participating in the ODR Portal.

Market Participants shall promptly attend to all complaints or disputes, and communications shall clearly specify the availability of the SCORES portal and the ODR Portal to the investor/client, and that the same could be accessed if unsatisfied with the response (or the lack thereof) of the Market Participant.

They shall duly train their staff in attending to complaints/disputes and in handling the references arising from the SCORES portal or the ODR Portal, and in participating in online conciliation and arbitration.

SEBI may request the Market Participants to maintain such level of interest-free deposit with the MIIs as considered necessary and appropriate for honouring of any arbitral awards or amounts payable pending initiation of arbitration or challenge to an arbitral award.

When a broker defaults

Steps carried out by the Stock Exchange for the benefit of investors when a stock broker defaults:

• A circular is issued to inform about declaration of the Stock Broker as Defaulter.
• Information of the defaulter stock broker is disseminated on the Stock Exchange website.
• A Public Notice is issued informing the declaration and inviting claims within a specified period.
• Intimation to clients of defaulter stock brokers via emails and SMS for facilitating lodging of claims within the specified period.

Information available on the Stock Exchange website:

• Norms for eligibility of claims for compensation from IPF.
• Claim form for lodging claim against a defaulter stock broker.
• FAQ on processing of investors' claims.
• Provision to check online status of a client's claim.
• Standard Operating Procedure for handling of claims of investors in cases of default by TMs.
• Claim processing policy against Defaulter/Expelled TMs.
• List of Defaulter/Expelled TMs and public notices issued.

And on transparency: all the Stock Exchanges / Depositories / Clearing Corporations shall disclose on their websites the data on complaints received against them and redressal thereof, latest by the 7th of the succeeding month.

Investor Protection Fund

The Central Government, vide notification dated August 22, 1985, has stipulated the setting up of the Investor Protection Fund by Stock Exchanges. This fund should take care of legitimate investment claims which are not of speculative nature of the clients of defaulting member(s).

The Investor Protection Fund is a fund established and maintained by the Exchanges with an aim to protect the interests of the clients of the trading members of the Exchange, who may have been declared defaulters or who may have been expelled. The IPF shall be administered by way of a Trust created for this purpose.

All stock exchanges and depositories shall establish an IPF, and the IPF of the stock exchange and depository shall be administered through separate trusts created for the purpose.

Contributions to the IPF

Plus any other contribution as may be specified by SEBI from time to time.

Use of the income: at least 70% of interest or income from IPF received every year shall be ploughed back to IPF; 25% can be utilised for promotion of investor education and investor awareness.

Using the fund

The amount in the IPF and any interest or income generated from it shall be utilized to meet the legitimate investment claims of the clients of the defaulting TMs, and to pay interim relief to investors, if any.

Adequacy review: the stock exchanges and depositories shall conduct a half-yearly review (by end of March and September every year) to ascertain the adequacy of the IPF corpus. In case the IPF corpus is found to be inadequate, the same shall be enhanced appropriately.

Who is eligible:

• The claims received against the defaulter TMs during the specified period shall be eligible for compensation from the IPF.
• Where the clients have dealt through the authorized persons of the defaulting TM, registered with the stock exchange, such clients will also be eligible.
• The claims of the investors or clients arising out of speculative transactions shall not be eligible for compensation from the IPF.
• Any claim received after three years from the date of expiry of the specified period may be dealt with as a civil dispute.

The process: the stock exchanges shall fix suitable per investor compensation limits, in consultation with the IPF Trust and SEBI. Once a TM has been declared defaulter, the claim(s) shall be placed before the Member Committee for sanction and ratification. The MC's legitimate claims shall be sent to the IPF Trust for immediate disbursement. The IPF Trust shall disburse the amount of compensation to the investor, and such compensation shall not be more than the maximum amount fixed for a single claim of an investor.

Disclosure: the Stock Exchange will disclose the corpus of the IPF on its website and update the same on a monthly basis, and also disseminate the policy on processing investor claims from IPF.

Preventing double claims: in order to prevent the possibility of identical claims of clients of defaulter trading members being paid by multiple exchanges, stock exchanges shall share amongst themselves relevant data with respect to clients of defaulter/disabled members within 10 days from the date of disablement. Further, at the time of disbursing the claims, they shall share the details of the client — PAN, UCC, amount disbursed — with the other exchanges.

Investor Services Fund

The stock exchange shall set aside at least 20% of the listing fees received for the ISF for providing services to the investing public.

Supervision of the contributions and utilization of the ISF corpus will rest with the Regulatory Oversight Committee.

ISF can be utilized only for promotion of investor education and investor awareness programs through seminars, lectures, workshops, publications (print and electronic media) and training programs, aimed at enhancing securities market literacy and promoting retail participation in the securities market.