kindly nore recent SEBI circular in this regard
DEPUTY GENERAL MANAGER
MARKET REGULATION DEPARTMENT
MRD/DSA/SE/CIR-18/2009
December 2, 2009
The Managing Directors / Chief Executive Officers /
Executive Directors of
All Stock Exchanges
Sub: Limitation period for filing of Arbitration reference
1. The Secondary Market Advisory Committee (SMAC), reviewed the
existing provisions in the Exchange Byelaws, which specify a limitation
period of six months for reference of a complaint/claim/difference/dispute
for arbitration.
2. While computing the said limitation period, the time taken in amicable
settlement of claims, complaints, differences, disputes through the
Investors Grievances Redressal Committee mechanism of the Exchange
under its Rules, Bye-laws & Regulations is excluded.
3. Based on the recommendations of the SMAC, it has now been decided
that the limitation period of six months shall be computed from the end of
the quarter during which the disputed transaction(s) were executed. Along
with the exclusion mentioned under para (2) above and subject to
sufficient documentary proof, the period of one month from the date of
receipt of complaint/claim/difference/dispute by the trading member or the
actual time taken by the trading member from the date of receipt of
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complaint/claim/difference/dispute by the trading member to the date of
receipt of the trading member’s last communication by the investor, to
resolve / counter the complaint / claim/ difference/ dispute, whichever
ends earlier, shall also be excluded.
4. Apart from the above, in certain instances it was observed by SEBI that
the arbitration applications are being rejected on the grounds of having
exceeded the limitation period, without going into the circumstances
leading to the arbitration not being filed within the time period. In case the
arbitration application is not filed within the limitation period for reasons
beyond the control of the party, rejection of the same is not in the interest
of investors. Accordingly, it has been decided that:
The limitation period can be extended in certain cases for a further period
period of three months, only after obtaining sufficient documentary proof in
this regard and recording the reasons for the same in writing. In this
regard, the party shall provide to the stock exchange sufficient
documentary proof regarding the reasons for the delay in filing the
arbitration case and the stock exchange shall examine, if the reasons /
documentary proof submitted, for not filing the arbitration within the
limitation period were indeed beyond the control of the party.
5. In view of the above, all the Stock Exchanges are advised to :-
a) make necessary amendments to the relevant bye-laws, rules and
regulations for the implementation of the above decision
immediately.
The stock exchange can decide on extending the limitation period for aPage 3 of 3
b) bring the provisions of this circular to the notice of the member
brokers of the Exchange and also to disseminate the same through
their website.
c) communicate to SEBI, the status of implementation of the
provisions of this circular in the Monthly Development Report to
SEBI.
This circular is being issued under Section 11(1) of the SEBI Act, 1992 to protect
the interests of investors in securities markets and to promote the development
of and to regulate the securities market.
This circular is available on SEBI website at
www.sebi.gov.inYours faithfully
RAJESH KUMAR D
of three months by the stock exchange.
