Pre-Conciliation
The first, informal stage of SEBI's ODR framework: an MII facilitates a direct discussion between investor and market participant, who must resolve it within 21 calendar days before formal proceedings begin.
In plain language
A securities-market dispute does not have to become a formal case right away. SEBI's Online Dispute Resolution framework gives it one more chance to settle informally first. That first, light-touch stage is Pre-Conciliation.
A Market Infrastructure Institution (MII) simply helps the two sides talk. It is not a conciliator, and it is not an arbitrator. The two sides are the investor and the other party — a listed company, an intermediary, or another regulated entity. If this works, the dispute never has to become a formal case at all.
How it works
From Chapter 13, section 13.3 (Online Resolution of Disputes in the Indian Securities Market): under the common ODR Portal, accessed at smartodr.in, ODR comprises three stages — Pre-Conciliation, Conciliation, and Arbitration.
Pre-Conciliation is described as "an initial stage where the Market Infrastructure Institution (MII) facilitates an amicable discussion between the investor and the intermediary/listed company/regulated entity (Market Participant)." Resolving the issue at this stage means formal proceedings are not initiated at all. The Market Participant needs to resolve the dispute within 21 calendar days.
Only where Pre-Conciliation does not resolve the dispute does the matter move to the more formal Conciliation stage — where a neutral conciliator is appointed and works toward a settlement, failing which it can proceed to binding Arbitration.
A worked example
An investor disputes a brokerage charge with his intermediary through the ODR Portal at smartodr.in. The complaint is first taken up as Pre-Conciliation: the relevant MII facilitates a direct, informal discussion between the investor and the intermediary, without appointing any neutral conciliator.
The intermediary agrees to reverse the disputed charge within the 21-calendar-day window the Market Participant has to resolve the matter at this stage. Because the dispute is resolved in Pre-Conciliation, it never proceeds to formal Conciliation or Arbitration — no conciliator is appointed, and no arbitration deposit is ever required.
Had the intermediary not resolved it within 21 days, the dispute would have moved on to the Conciliation stage, where a neutral conciliator is formally appointed to attempt a settlement.
Why NISM asks about it
Chapter 13, section 13.3, introduces Pre-Conciliation, Conciliation and Arbitration as the three defined stages of ODR under the SEBI (Alternative Dispute Resolution Mechanism) (Amendment) Regulations, 2023. Expect a question on the sequence (Pre-Conciliation always comes first) and on the 21-calendar-day window for the Market Participant to resolve a dispute at this stage.
Common exam traps
- Pre-Conciliation precedes Conciliation — do not reverse the order; a neutral conciliator is appointed only at the Conciliation stage, not during Pre-Conciliation.
- The 21-calendar-day window belongs to Pre-Conciliation, and is separate from any timelines that apply once the dispute proceeds to formal Conciliation.
- Resolving a dispute at Pre-Conciliation stops formal proceedings from starting at all — it is not merely a faster route to the same formal outcome.
- Investors can raise disputes under this framework against listed companies, specified intermediaries, and regulated entities — three named categories.
Check yourself
1.Within how many days must an entity redress a grievance and upload the Action Taken Report on SCORES?
- a)Fifteen
- b)Twenty-one
- c)Forty-five
- d)Sixty
Show the answer
Answer: (b) Twenty-one
Entities shall resolve the Complaint and upload the Action Taken Report (ATR) on SCORES within 21 calendar days of receipt of the Complaint. The ATR is automatically routed to the complainant.
Note "calendar days", not working days.
This is the headline timeline of SCORES 2.0: the timelines for redressal of investor complaints across the securities market i.e. 21 calendar days from date of receipt of complaint and Monitoring of the timely redressal of the investors' complaints by the 'Designated Bodies'.
The other three salient features: two levels of review: First review by the 'Designated Body'... Second review will by SEBI if the investor is still dissatisfied after the first review · introduction of auto-escalation of complaints to the next level in case of non-adherence to the prescribed timelines by the Market participant or the Designated Body · integration with KYC Registration Agency database for easy registration of the investor on to SCORES.
How the complaint gets to the entity: complaints lodged through SCORES are automatically forwarded to the concerned Entity with a copy marked to the Designated Body.
And missing the deadline has an automatic consequence: if a complainant files a review, or the Entity has not submitted the ATR within 21 days, the Designated Body shall begin the first review with the Entity.
The same 21 calendar days appears in ODR: in pre-conciliation, the market participant needs to resolve the dispute within 21 calendar days.
2.The three stages of dispute resolution on the SMART ODR platform are:
- a)Complaint, review and appeal
- b)Pre-Conciliation, Conciliation and Arbitration
- c)Mediation, adjudication and enforcement
- d)Negotiation, litigation and settlement
Show the answer
Answer: (b) Pre-Conciliation, Conciliation and Arbitration
On SMART ODR, ODR comprises Pre-Conciliation, Conciliation, and Arbitration.
Pre-Conciliation: this is an initial stage where the Market Infrastructure Institution (MII) facilitates an amicable discussion between the investor and the intermediary/listed company/regulated entity (Market Participant). Resolving an issue in pre-conciliation ensures that formal proceedings are not initiated. The market participant needs to resolve the dispute within 21 calendar days.
Conciliation: this is a more formal process where a conciliator (a neutral third party) works with the disputing parties to reach a mutually acceptable agreement. It's like a facilitated negotiation with the goal of finding a compromise that all parties can agree on.
Arbitration: this is a legal process where a dispute is resolved by one or more arbitrators (neutral third parties) whose decision (the arbitral award) is binding and enforceable.
The essential distinction between the last two: a conciliator works with the disputing parties to reach a mutually acceptable agreement; an arbitrator issues an award that is binding and enforceable. Both are neutral third parties — only one decides.
Where the platform comes from: SEBI has put in place a common Online Dispute Resolution Portal ("ODR Portal") whereby the existing dispute resolution mechanism in the Indian securities market has been streamlined under the aegis of Market Infrastructure Institutions (MIIs)... which harnesses online conciliation and online arbitration, as per SEBI (Alternative Dispute Resolution Mechanism) (Amendment) Regulations, 2023.
The portal is https://smartodr.in, and disputes may be raised against Listed Companies · Specified Intermediaries · Regulated entities.
3.The essential difference between conciliation and arbitration on the ODR platform is that:
- a)Conciliation involves a neutral third party while arbitration does not
- b)A conciliator works with the parties to reach a mutually acceptable agreement, while an arbitrator's award is binding and enforceable
- c)Conciliation is conducted online and arbitration in person
- d)Arbitration is voluntary while conciliation is compulsory
Show the answer
Answer: (b) A conciliator works with the parties to reach a mutually acceptable agreement, while an arbitrator's award is binding and enforceable
Conciliation: this is a more formal process where a conciliator (a neutral third party) works with the disputing parties to reach a mutually acceptable agreement. It's like a facilitated negotiation with the goal of finding a compromise that all parties can agree on.
Arbitration: this is a legal process where a dispute is resolved by one or more arbitrators (neutral third parties) whose decision (the arbitral award) is binding and enforceable.
Option A is wrong on a shared feature — both a conciliator and arbitrators are described as neutral third parties. The difference lies in what they do, not in what they are.
Read the verbs. The conciliator works with the disputing parties; the arbitrator resolves the dispute. A conciliation ends in an agreement the parties reach; an arbitration ends in an award imposed on them.
Option C is wrong because the whole platform is online — SEBI's portal harnesses online conciliation and online arbitration for resolution of disputes arising in the Indian Securities Market.
Before either stage comes pre-conciliation: this is an initial stage where the Market Infrastructure Institution (MII) facilitates an amicable discussion between the investor and the intermediary/listed company/regulated entity (Market Participant). Resolving an issue in pre-conciliation ensures that formal proceedings are not initiated. The market participant needs to resolve the dispute within 21 calendar days.
The framework: SEBI (Alternative Dispute Resolution Mechanism) (Amendment) Regulations, 2023, with disputes registered on https://smartodr.in against Listed Companies · Specified Intermediaries · Regulated entities.
Where this is taught
Free preparation for NISM Series VIRelated terms
- SCORESSEBI's centralised web-based system for processing investor complaints, on which the company or intermediary must upload an Action Taken Report and the investor can watch the status online.
- ArbitrationQuasi-judicial dispute resolution under the Arbitration and Conciliation Act, 1996, run online by an ODR Institution once conciliation fails; the award binds unless challenged under Section 34.
- ConciliationThe first, consensual stage of SMART ODR: a sole independent conciliator appointed by an ODR Institution tries to settle an investor dispute within 21 days, and if it fails fixes the admissible claim value.
- Online Dispute ResolutionThe MII-administered process — pre-conciliation, conciliation, then arbitration — through which investor disputes with portfolio managers are resolved online via the SMART ODR portal.