SEBI/MRD/ OIAE/ Dep/ Cir- 4/2010- Dated:-January 29, 2010
Sub: Disclosure of investor complaints and arbitration details on Depository website
1. SEBI has received feedback from investors and investor associations to improve transparency in the ‘grievance redressal mechanism’. Based on the feedback and inputs received from them transparency in ‘grievance redressal’ is identified as a key area to augment investor protection. It is envisaged that transparency will also improve the general functioning of the market by providing investors the wherewithal to make informed choice.
2. Accordingly, it has been decided that the Depositories shall henceforth disclose the details of complaints lodged by Beneficiary Owners (BO’s)/ investors against Depository Participants (DPs) in their website. The aforesaid disclosure shall also include details pertaining to arbitration and penal action against the DPs.
3. The format for the reports for the aforesaid disclosure, prepared following due deliberations and inputs from the Depositories, are given as annexure to this circular (12 pages), consisting of the following reports:
a. Report 1A: Complaints received against DPs during 2009-10
b. Report 1B: Redressal of Complaints received against DPS during 2008- 09
c. Report 1C: Redressal of Complaints received against DPs during 2009- 10
d. Report 2A: Details of Arbitration Proceedings (where Investor is a party) during 2008-09:
e. Report 2B: Details of Arbitration Proceedings (where Investor is a party) during 2009-10
f. Report 3A: Penal Actions against DPs during 2008-09
g. Report 3B: Penal Actions against DPs during 2009-10
h. Report 4A: Redressal of Complaints lodged by investors against Listed Companies during 2008 -09.
i. Report 4B: Redressal of Complaints lodged by investors against Listed Companies during 2009 -10.
j. The Depositories are accordingly advised to:
a. bring the provisions of this circular to the notice of the DPs, Companies and their Registrar & Transfer Agents (RTA’s) and also to disseminate the same on the website;
b. arrange to disclose details as per the aforesaid reports in their website within a period of one month from the date of this circular on a continuous basis;
c. arrange to update the aforesaid reports on a quarterly basis, except the reports 1A, which shall be updated on a weekly basis;
d. make amendments to the relevant bye-laws, rules and regulations for the implementation of the aforesaid disclosures, if necessary;
e. communicate to SEBI, the status of the implementation of the provisions of this circular in the Monthly Development Report;
k. For any clarification in this matter, the Chief General Manager, Office of Investor Assistance and Education, SEBI may be contacted at 26449400.
l. This circular is being issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992 and Section 19 of the Depositories Act, 1996 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.