How the online dispute resolution system announced by Sebi will work

• Recently, SEBI issued a circular, streamlining the existing dispute resolution mechanism in the securities market by establishing a common ODR portal.
• The new system will harness online conciliation and online arbitration for resolution of disputes arising in the securities market.

ODR Institutions

• According to SEBI, each Market Infrastructure Institutions (MII) will identify and empanel one or more independent ODR institutions.
• These institutions will have qualified conciliators and arbitrators.
• MIIs in consultation with their empanelled ODR institutions, will establish and operate a common ODR portal.
• All listed companies, specified intermediaries and regulated entities in the securities market will enrol on the ODR portal.
• SEBI has not specified who will qualify as ODR institutions.

The procedure

• An investor or client will first take up the grievance with the market participant by lodging a complaint directly with the concerned market participant.
• If the grievance is not redressed satisfactorily, the investor or client may escalate the same through the SCORES Portal.
• After exhausting all available options, if the investor or the client is still not satisfied, he or she can initiate dispute resolution through the ODR Portal.
• The first step is conciliation. If this fails, the next step is arbitration.

Implementation timeline

• The First Phase
  • It will include development of the ODR portal, and empanelment of ODR institutions, conciliators and arbitrators.
  • Then the registration of trading members and depository participants.
  • Then, the commencement of registering of complaints against brokers and depository participants and their resolution.
• The Second Phase
  • It will include registration of all other market participants on the ODR Portal.
  • This will be followed by commencement of registering of complaints/disputes against all other market participants and their resolution
  • Finally, the implementation of related processes and requirements would be done with effect by September 16.