SEBI says its Charter is empowering investors, shares initiatives to promote transparency in markets

The Securities and Exchange Board of India (SEBI) on January 17 said it has taken steps to augment its ‘Investor Charter’ for securities markets. In a note titled ‘Empowering Investors through Investor Charters’, SEBI clarified that it has “taken various steps to implement the Charter”.

In a notice on November 17, the regulator said the Charter aims to “protect investors’ interests, promote transparency in markets, and enhance awareness, trust and confidence among the investors”.

The capital markets regulator has developed separate Investor Charters regarding investor-related activities of various intermediaries in consultation with the respective entities, which are published on their websites.

These intermediaries include stock exchanges, depositories, and SEBI-registered intermediaries and regulated entities (stock brokers, depository participants, asset management companies, registrar and transfer agents, investment advisers, research analysts, merchant bankers, etc.), Stock Exchanges, Depositories and others.

These SEBI Charters contain information related to details of various services provided by the intermediaries to investors, their timelines, importance of preservation of relevant documents by the investors, investor grievance redressal mechanism; and are “expected to help investors to improve their ease of investing in Indian securities market”.

In SEBI’s own Charter, steps have also been taken to enhance the effectiveness of the investor grievance redressal mechanism. The regulator is now publishing the status of disposal of investor grievances received in SCORES (SEBI Complaints Redress System) on its website on a monthly basis. Besides this, details which are pending for more than three months with different intermediaries, are also being published.

For repeated or large number of complaints on any issue, SEBI is analysing the root cause and if required making “appropriate policy changes to address the issue”.

Some of the recent policy initiatives taken by SEBI after such analysis include:

1. Amendments pertaining to the Investor Protection Fund (IPF) / Investor Service Fund (ISF) and its related matters, inter-alia, to expand the scope of dispute resolution.
2. The norms for processing of investor services requests by the RTAs have been standardized and simplified and common norms have been introduced for registering / change in details like PAN, KYC and nominee and also for other services involving securities certificate.
3. Providing for an electronic interface for processing investor’s queries, complaints and service requests by RTAs.
4. All holders of physical securities in listed companies are now required to mandatorily furnish their PAN, KYC details including bank account details so as to pre-empt grievance pertaining to non-receipt of payments and intimation / notification from the company.
5. All holders of physical securities in listed companies are now required to mandatorily furnish their nomination (or file declaration to opt out) to pre-empt grievance pertaining to transmission.

SEBI is also looking to provide an effective mechanism for resolving disputes between investors and regulated entities and is examining, in consultation with regulated entities, the possibility of introducing an alternate dispute resolution mechanism in various agreements.