INVESTOR GRIEVANCES & ARBITRATION (STOCK EXCHANGES)

(Source: NSE Website www.nseindia.com)

Complaints taken up at the Exchange

Investor Services Cell of the Exchange deals with the complaints of investors against the Trading Members of the Exchange, or against the listed companies. Investors can lodge their complaints in the format prescribed by the Exchange along with the supporting documents either by registering their complaints in electronic mode through our website www.nseindia.com or may send their complaints to the nearest investor service centre.

Generally, the complaints of following nature are taken up for resolution by the Exchange:

Complaints against Exchange Members

Capital Markets/ Futures & Options Segment:

  • Non-Issuance of the Documents by the Trading Member(TM)
  • Non-receipt of funds / securities
  • Non-receipt of margin/security deposit given to the Trading Member
  • Non-Receipt of Corporate Benefit (dividend / interest / bonus, etc.)
  • Auction value / close out value received or paid
  • Execution of Trades without Consent
  • Excess Brokerage charged by Trading Member / Sub-broker
  • Non-receipt of credit balance as per the statement of account
  • Non-Receipt of Funds / Securities kept as margin
  • Excess Brokerage Charged (other than on Option Premium)

Complaints against Listed Companies:

  • Public / Further offerings: Complaint regarding non-receipt of:
    • a. Allotment Advice, securities allotted, refund order
    • b. Interest on delay in Redemption / Refund Amount
    • c. Sale Proceeds of Fractional Entitlement
    • d. Composite Application Form (CAF) for a Rights offer, Rights for (CAF) Application
    • e. Securities purchased through a Rights Offer
    • f. Letter of offer for Buyback
  • Corporate Actions: Complaint regarding non-receipt of:
    • a)Dividend
    • b)Interest on Debentures, Bonds or other Debt Instruments
    • c) Securities on account of a Bonus / De-merger / Merger / Stock Split
    • d) Redemption Amount
  • Transfer of Securities: Complaint regarding non-receipt of:
    • a) Securities after Dematerialization
    • b) Securities after Transfer/Transmission
    • c) Duplicate Certificate relating to Securities
  • Miscellaneous: Complaint regarding non-receipt of copy of the Annual Reports

Complaints not taken up at Exchange


The Investor Services Cell of the Exchange will not be in a position to deal with certain types of complaints. Illustrative list of nature of complaints that would not be handled by Investor Services Cell are as under:

Complaints against Exchange Members:

  • Complaints in respect of transactions which are already subject matter of Arbitration proceedings
  • Complaint involving payment of funds and transfer of securities to entities other than Trading Member
  • Claims for mental agony/harassment and expenses incurred for pursuing the matter with the ISC
  • Claim for notional loss, opportunity loss for the disputed period or trade
  • Complaints pertaining to trades not executed on the Trading System of the Exchange
  • Claims of sub-broker/authorized persons for private commercial dealings with the trading member
  • Claims relating to transactions which are in the nature of loan or financing which are not within the framework defined by the Exchange
  • Claims which are relating to entities/activities which are not regulated by Exchange

Against a Company:

  • Complaints pertaining to securities not listed on the Exchange
  • Complaints for refund of postal charges, telephone expenses and miscellaneous charges
  • Compensation for mental agony, harassment
  • Notional loss due to delay in receipt of shares sent for transfer or after IPO
  • Complaints which fall outside the purview of the listing agreement and not related to the Exchange
  • Pledge and assignment of shares
  • Inability of complainant to establish ownership of security.

Register an E-complaint

Investor may use the following link to register the complaint online:

https://www.nse-investorhelpline.com:8443/EIS/

Investors are requested to use the following forms:

  • Investor Complaint Form – TM for lodging complaints against trading members/registered sub-brokers, and
  • Investor Complaint Form - CO for complaints in respect of companies traded on NSE.

These forms are available on the website of NSE: www.nseindia.com under the link http://www.nseindia.com/invest/content/reg_complaint_offline.htm


ARBITRATION

1. What is “Arbitration”?

Arbitration is a quasi-judicial process of settlement of disputes among Trading Members, investors, clearing members, sub-brokers etc. It aims at quicker resolution of the disputes between parties amicably. When any party is not satisfied with the settlement and thinks that its complaint has not been resolved through the complaint resolution process of the Exchange, it may choose the route of arbitration.

2. What kind of disputes is covered by Exchange Arbitration Mechanism?

All disputes arising out of transactions done on the Exchange by the parties or anything incidental thereto are eligible for arbitration mechanism provided by the Exchange.

3. What is the legal framework for arbitration mechanism provided by Exchange?

Arbitration framework at the Exchange is governed by Rules, Bye laws, Regulations & Circulars issued by the Exchange and SEBI, from time to time.

4. Who can apply for arbitration?

(a) Investors who have disputes against the Trading Members/Sub-brokers/Authorized Persons with regard to trades and transactions done on the Exchange or anything incidental thereto.

(b) Trading members who have claim, dispute or differences against investors/Sub-brokers/Authorized Persons/Clearing Members and vice versa with regard to the trades and transactions done on the Exchange or anything incidental thereto.

5. Within what time are the parties required to approach the Exchange for filing arbitration?

As per stipulations of SEBI, the limitation period for filing an arbitration application is governed by law of limitations. As of date, as per Limitation Act, 1963, 3 years from date of dispute is the time period within which parties are required to approach the Exchange for filing arbitration.

6. Can an investor concurrently pursue complaint resolution with Investor Service Cell (ISC) as well as Arbitration?

Complaint resolution through Investor Service Cell (ISC) is administrative in nature whereas arbitration is a quasi-judicial process. Hence, once arbitration proceedings are initiated against the trading member, the complaint filed with the ISC is treated as closed.

7. Can an investor file arbitration against a trading member who is expelled or declared defaulter by the Exchange?

Once a trading member is expelled/declared defaulter he ceases to be a member of the Exchange. However, Exchange issues a public advertisement inviting claims against such trading members. Investors may prefer to present their claim to the Defaulter’s Committee Section within the stipulated time.

8. What are the different forms / documents used for filing an Arbitration application?

Forms and lists of documents required to be submitted when arbitration is filed against trading member are provided below:

Forms/ Documents

Purpose

1

Form no. 1

Application for arbitration

2

Statement of Case

Brief description of the case, date-wise summary of events leading to the dispute, basis of arriving at the claim amount and relief sought through arbitration

3

Cheque / Pay Order / Demand Draft in favour of NSEIL

Towards cost of arbitration

4

Statement of Accounts / DP statements

In case of dispute for funds / securities

5

Copies of the relevant Contract Notes & Bills, Pan card copy

As referred in the statement of case to

substantiate the claim.

9. How does an investor obtain arbitration application forms, if he/she wishes to apply for Arbitration?

Arbitration application forms are available on Exchange website http://www.nseindia.com/content/assist/arbitration/asst_arb_forms.zip. An applicant may download the form and use it for filing application. Alternatively, a request for forms can be made to the Exchange by sending an email to ignse@nse.co.in along with the complete postal address, so that the forms can be mailed to them. The forms can also be obtained from any of the Regional Arbitration Centres.

10. What is a statement of case?

A statement of case is a brief history of the dispute from the beginning to the end. Entire date-wise sequence of events which took place between the investor and the trading member needs to be described. Statement of case is the first source of information which the sole arbitrator/ arbitrator panel refers to in advance to understand the case, and hence it is very significant.

11. Where is the arbitration application filed?

The arbitration application has to be filed at the Regional Arbitration Centre (RAC) nearest to the address mentioned in KYC of the investor. Exchange has established RACs at Mumbai, Ahmedabad, Bangalore, Chennai, Delhi, Hyderabad, Indore, Jaipur, Kanpur, Kolkata and Pune to accept arbitration applications.

12. Does Exchange have a panel of arbitrators? How many arbitrators would look into the case?

Exchange on a continuous basis maintains panel of arbitrators at each of its Regional Arbitration Centre. The arbitrator panel of the Exchange consists of eminent persons from the fields of judiciary, banking and financial services. The appointment is based on the criteria, like qualification, age and experience. If the claim value is more than Rs. 25 Lakhs, a panel of three arbitrators is constituted and if the claim value is less than Rs. 25 Lakhs, a sole arbitrator is appointed. The region-wise list of arbitrators is available on the Exchange website at: http://www.nseindia.com/content/assist/arbitration/asst_arb_panel.pdf.

13. How is the arbitration panel appointed for a case?

The applicant at the time of making arbitration application has to give his/her preference of arbitrators in Form I. Likewise, on admission of the matter, preferences of arbitrators are called from the respondent. The arbitrators are then appointed through a computerized automated process as per SEBI Circular dated March 18, 2013, in which neither the Exchange officials nor the parties asking for arbitration are directly involved.

14. At the time of making arbitration application, is the applicant required to deposit any money/fees with the Exchange?

The deposit to be made by the investor at the time of making arbitration application is as follows:

a) If the dispute involves a claim amount less than or equal to Rs. 10 lakhs, then the investor, either applicant or respondent, is exempted from payment of fees towards the cost of arbitration. In such cases the Exchange bears the cost of the fees on behalf of the investor.

b) If the dispute involves a claim amount of more than Rs. 10 lakhs, the investor has to deposit fees as provided herein below:

Amount of Claim

/Counter Claim,

whichever is higher

If claim is filed within six

months

If claim is filed after six

months

> Rs.10,00,000 - ≤

Rs.25,00,000

Rs. 13,000 plus 0.3% amount above Rs. 10 lakh

Rs. 39,000 plus 0.9% amount

above Rs. 10 lakh

> Rs. 25,00,000

Rs. 17,500 plus 0.2 % amount above Rs. 25 lakh subject to maximum of Rs. 30,000

Rs. 52,500 plus 0.6 % amount above Rs. 25 lakh subject to maximum of Rs.90,000

15. How the time limit of six months stated above is computed?

For the purpose of computing the six month period the following facts will be considered:

(a) Six month period shall be computed from the end of the quarter during which the disputed transactions were executed.

(b) Time taken by trading member to resolve the claim of the investor or one month from the date of receipt of dispute by the member, whichever is earlier, is excluded while calculating the six month period.

(c) Time taken by the Investor Service Cell of Exchange to resolve the dispute will be exempted while calculating the six month period.

16. Are there any other charges payable apart from the one mentioned above?

Stamp duty is applicable on the awards passed by arbitrators. The amount of stamp duty payable is to be deposited along with the deposit mentioned above in (14). Initially the stamp duty is to be deposited with the Exchange based on the claim amount of the matter filed and on passing of the award, the stamp duty is calculated on the final award amount passed in the matter. The amount of stamp duty payable on the award is governed as per the stamp duty applicable to the particular state and may differ for every Regional Arbitration Center (RAC).

17. What does the respondent do if arbitration application is filed against him?

The respondent has to reply by the Form II provided to him by the Exchange. The form II comprises of respondents choice of arbitrators and statement of defense to the claim, along with the required deposit amount.

18. What is a counter claim?

A counter claim refers to an amount claimed by a respondent against the applicant in an arbitration matter. The counter claim is arrived at by the respondent on the basis of amount or shares/ monies due to him from the applicant.

19. How does the arbitrator panel deal with the Arbitration Case?

The arbitrator panel fixes a date for hearing on which the investor and trading member have to appear before the arbitrator panel to present their respective case. In case the claim amount is less than Rs.25,000, the arbitrator may or may not hold hearings and pass the award based on the documents submitted by both the parties. If the claim amount is more than Rs.25,000, the arbitrator may hold hearing/s unless specifically denied by both the parties in writing.

20. What happens if the party to arbitration is unable to attend the arbitration hearings?

If the hearing date fixed by the arbitrator panel is not suited to either party or both the parties are unable to attend the same, in such a case they can apply for adjournment/postponement of hearing. The parties should give an application in writing to the Exchange giving reasons for seeking adjournment/postponement well in advance, so as to enable the Exchange to forward such request to the arbitrator panel. The arbitrator panel using their discretion may grant the adjournment, subject to such conditions as may be deemed fit in the matter.

21. Can the parties appoint representatives to attend hearing?

Investors may attend the arbitration proceedings and defend the matter on their own or appoint authorized representative or a counsel/attorney/advocate to defend the matter by executing a notarized/registered power of attorney. In case the investor decides to be represented through a counsel/attorney/advocate, only then the trading member will be provided with an equal opportunity to appoint a counsel/attorney/advocate.

22. What are the timelines for completion of arbitration proceedings?

The arbitrator panel is required to complete arbitration proceedings within four months from the date of appointment of arbitrator/s, and pass the Award. However, the period can be extended by two more months by the Relevant Authority based on the request of either of the parties involved in arbitration, or on the request of the arbitrator panel.

23. What is an Award?

Award is the judgment passed by the arbitration panel which gives a direction to either of the disputing parties as regard to their claim raised in the arbitration matter.

24. Can the Award be given on agreed terms?

If after the appointment of the arbitrator panel, the parties settle the dispute amicably, then the arbitrator panel will record the settlement of the dispute in the form of an arbitration award on agreed terms. However, the agreed terms have to be in respect of transactions on the Exchange, and all documents in support of this need to be furnished by the parties.

25. Who will bear the costs of arbitration?

Party against whom the arbitral award has been passed will bear the costs of arbitration. The Exchange gives a full refund of deposit to the party in whose favour the award has been passed.

26. What if either of the parties is aggrieved with the award passed by the arbitrator panel?

If either of the parties is aggrieved by the award, the aggrieved party may approach the Exchange with an application on the prescribed format for appeal before the appellate arbitrators, along with applicable deposit, within a period of 30 days from the date of receipt of the arbitral award or the aggrieved party can challenge the award u/s 34 of Arbitration and Conciliation Act, 1996 in the court nearest to the address provided by the constituent in the KYC form or as per the change in address communicated thereafter by the constituent to the trading member.

27. Can any changes be made in the Award after it is passed by arbitrator and delivered to the parties?

The Award once passed by the arbitrator is final and binding on the parties, unless challenged before a higher forum. In case certain corrections or interpretation are required to be made in the Award, either party involved in arbitration can file application with the Exchange u/s 33 of Arbitration and Conciliation Act, 1996 for correction or interpretation of the award, within one month from the date of receipt of the award. The Exchange will forward the application to the concerned arbitrator/s, and in case the arbitrator/s feel/s the requirement of correction/interpretation in the Award as requested, he/they can do so by passing a separate order.

28. What happens if arbitral award is in favour of the investor?

When the arbitral award given by the arbitrator panel is in favour of the investor the exchange will set aside the Award amount from the deposits of the trading member and the same will be kept in a separate escrow account with the Exchange. If the trading member fails to prefer an appeal against the Award within the specified time, then the Award amount is released to the investor.

29. What are the different forms / documents used for filing an appeal application?

Forms and lists of documents required to be submitted while filing an appeal application with the Exchange are as follows:

Forms / Documents

Purpose

Mandatory

1. Form no. III

For filing appeal against the award passed

2. Statement of appeal

Brief description of the grounds which are to be placed in the appeal and relief sought through the appeal process.

3. Cheque /Pay Order/Demand Draft for Rs. 30,000/- in favour of NSEIL (exclusive of stamp duty charges etc.).

Towards cost of appeal

30. What fee is to be paid by an investor in case he wants to file appeal before appellate arbitrators of the Exchange?

There is a fixed cost of Rs.30,000/- along with the stamp duty charges, etc., as applicable, which shall be borne by the Appellant only. The fees is non-refundable. In case the claim/counterclaim of the investor is up to Rs. 10 lakh, then the investor shall pay a fees of Rs. 10,000/- .

31. What does an investor have to do if trading member files appeal application against Arbitral Award?

The investor has to reply on Form IV provided to him by the Exchange. The Form IV comprises of investors choice of arbitrators and a statement of defense to the appeal.

32. How many arbitrators are appointed for the appellate arbitration?

The appellate arbitrator panel comprises of three arbitrators who are different from the ones who passed the original arbitral award appealed against.

33. How are arbitrators appointed for appellate arbitration matter?

The appellant at the time of preferring an appeal submits his preferences of arbitrators on Form III and after admission of the appeal, the respondent may submit his preference of arbitrators on Form IV. Based on the preferences received, the appellate arbitrator panel is appointed by a computerized automated process, as per SEBI Circular dated March 18, 2013, in which neither the Exchange officials nor the parties to arbitration are directly involved.

34. How does the appellate arbitrator panel proceed in the matter?

The appellate arbitrator panel hears both the parties and passes an appellate arbitral award. The appellate arbitral award may either set aside the decision of the original arbitral award or uphold the same.

35. What happens if the appellate arbitral award is in favour of the investor?

When the appellate arbitral award is passed in favour of the investor: -

(a) Trading member may settle the award and confirm the same to the Exchange;

(b) Trading member may challenge the appellate arbitral award under section 34 of the Arbitration and Conciliation Act, 1996, before the court nearest to the address provided by constituent in the KYC form, or as per the change in address communicated thereafter by the constituent to the trading member.

36. In which Court is the petition under section 34 of the Arbitration and Conciliation Act 1996 filed?

The petition under section 34 of the Arbitration and Conciliation Act 1996, shall be filed in the court nearest to the address provided by the constituent in the KYC form or as per the change in address communicated thereafter by the constituent to the trading member.

Regional Arbitration Centres (RACs)

MUMBAI:

Western Regional Office:

National Stock Exchange of India Ltd., 6th floor, Kohinoor City, Tower – 1,

Commercial – II, Kirol Road, Off. L. B. S. Marg Kurla (W), Mumbai – 400 070

Tel. No: (022) 25045300

Fax No: (022) 25045299

E-mail : nseiscmum@nse.co.in

AHMEDABAD:

National Stock Exchange of India Ltd Office No. 304/305 GCP Business Centre Opposite Memnagar Fire Station Navrangpura

Ahmedabad - 380009

Tel No : (079) 49008609 Fax No : (079) 49008660

E-mail : arbitration_ahm@nse.co.in

BANGALORE:

National Stock Exchange of India Ltd

Office No: 101, DBS House 26, Cunningham Road,

Bengaluru, Karnataka-560052

Tel No : (080) 40407188/ 40407101 Fax No : (080) 4040 7188

E-mail : nseiscbeng@nse.co.in

CHENNAI:

National Stock Exchange of India Ltd

8th Floor, Arihant Nitco Park, No 90, Dr Radhakrishnan Salai, Mylapore, Chennai 600 004.

Tel No : (044) 28479900/28479909 Fax No : (044) 28479926/27

E-mail : arb_cro@nse.co.in

DELHI:

National Stock Exchange of India Ltd. 4th Floor, Jeevan Vihar Building, Parliament Street, New Delhi-110 001

Tel No : (011) 23459133/ 49393033 Fax No : (011) 23459291

E-mail : nseiscdel@nse.co.in

HYDERABAD:

National Stock Exchange of India Ltd. 8-2-594/A/1, Third Floor, Urmila Heights, Opp Rainbow Hospital, Road No 10, Banjara Hills, Hyderabad – 500034

Tel No : 040-23357082/ 7083 Fax No : 04023357084

E-mail : nseischyd@nse.co.in

INDORE

National Stock Exchange of India Ltd.

Ground floor, B 31-6, Palika Plaza, Phase II, MTH Compound, Indore - 452 001

Tel. No : +91 9167577416

E-mail: nseiscind@nse.co.in

JAIPUR:

National Stock Exchange of India Ltd. 113 First floor, Gitanjali tower, Ajmer road, Sodala, Jaipur-302019

Tel No : Fax No : (0141) 4035195

E-mail : nseiscjai@nse.co.in

KANPUR

National Stock Exchange of India Ltd.,

365-366, 3rd Floor, Padam Tower-2, 14/113 Civil Lines, Kanpur – 208001

Tel. No : (0512) 32 32 669

E-mail: nseisckan@nse.co.in

KOLKATA:

National Stock Exchange of India Ltd.

1st Floor, Park View Apartments, 99, Rash Behari Avenue, Kolkata - 700 029.

Tel No : (033) 40400400

Fax No : (033) 40400440

E-mail : nseisckol@nse.co.in

PUNE:

M/s. Regus Business Centre (Pune) Pvt. Ltd. Regus, NSEIL's Office no. 233, Level - II, Connaught Place, Bund Garden, Pune – 411001

Tel No : (020) 40147519

Fax No : (020) 40147576

E-mail : nseiscpu@nse.co.in

PATNA
National Stock Exchange of India Ltd.,
Address: No. 305, 3rd Floor,
Vasundhara Metro Mall, Boring Canal Road, Patna - 800 001

Tel No: 09570660011
E-mail: nseiscpatna@nse.co.in

PUNE
National Stock Exchange of India Ltd.,
M/s. Regus Business Centre (Pune) Pvt. Ltd. Regus, NSEIL's Office no. 233, Level - II, Connaught Place,
Bund Garden, Pune – 411001
Tel. No : (020) 40147519
Fax No: (020) 40147576
E-mail: nseiscpu@nse.co.in

LUCKNOW
National Stock Exchange of India Ltd.,
110 - 1st floor, Titanium,
Shalimar Corporate Park, TC/G-1/1,
Vibhuti khand, Gomti Nagar,
Lucknow - 226 010

Tel. No.: (0522) 6060030
E-mail: nseiscluck@nse.co.in

VADODARA

National Stock Exchange of India Ltd.,
Atlantis Height, Office no. 505, 5th floor,
Sarabha Main Road, Alkapuri, Vadodara,
Gujarat 390007

Tel No: 09727734971
E-mail: nseiscvadodara@nse.co.in

HEAD OFFICE

National Stock Exchange of India Ltd., Exchange Plaza, C-1, Block G, Bandra Kurla Complex, Bandra (E) Mumbai – 400 051

Tel. No: (022) 26598173

Fax No: (022) 26598191

E-mail: ignse@nse.co.in

 

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