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Alternative Dispute Resolution Mechanism by SEBI

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SEBI has notified the SEBI (Alternative Dispute Resolution Mechanism) (Amendment) Regulations, 2023 on June 03, 2023, to amend regulations in relation to 17 SEBI regulated intermediaries inter alia Merchant Bankers, Mutual Funds, Credit Rating Agencies (CRAs), Alternative Investment Funds (AIFs), Investment Advisers etc. and the SEBI Listing Obligations and Disclosure Requirements Regulations in relation to listed companies.

The above SEBI Regulations have been amended to include a Dispute Resolution clause for resolution of disputes between the intermediary and investors through mediation / conciliation / arbitration.

This amendment was approved during the SEBI Board Meeting in June 2023 wherein the board approved linking SCORES with Online Dispute resolution (ODR) platform and providing two levels of review. The First review by the designated body recognised for monitoring and handling of grievances of the investors against the respective regulated entities if investor is dissatisfied with resolution provided by concerned regulated entity and the Second review by SEBI if the investor is still dissatisfied after first review. Readers can read more about the SEBI Board Meeting of June 2023 on a previous post made by Regstreet Law Advisors available at: https://lnkd.in/d7mtGbPi.

The amendment is a stepping stone in order to strengthen and standardise the alternative dispute resolution mechanism in the securities market to empower the investors. The Board also approved the proposal to revamp SEBI SCORES by reducing timelines, introducing auto-routing of the complaint to concerned regulated entities and auto-escalation of complaints in case of non-adherence to the prescribed timelines by the regulated entity. It also allowed conducting proceedings in a hybrid mode along with streamlining the dispute resolution process and adoption of other measures to strengthen enforcement of awards.

A copy of the SEBI (Alternative Dispute Resolution Mechanism) (Amendment) Regulations, 2023 is attached below.

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