The Securities and Exchange Board of India (Sebi) on Tuesday introduced new rules to improve the effectiveness of grievance redressal mechanism at commodity exchanges. The new norms include public dissemination of profiles of arbitrators, performance review of arbitrators, three -stage fee structure for faster implementation of award and to discourage delayed filling of arbitrations by trading members.
According to the new rules, commodity exchanges in the country will have to disseminate information such as brief profile, qualification, areas of experience, number of arbitration matters handled and pre-arbitration experience of the arbitrators on their website. Sebi also said there would be separate panels for arbitration and appellate arbitration. For appellate arbitration, at least one member of the panel should be a retired judge. However, exchanges will have to obtain prior approval of Sebi before empanelment.
Apart from this, the exchanges will have to create a common database of defaulting clients accessible to trading members and depository participants across bourses. The market watchdog said the decision to revamp the grievance redressal mechanism at all national commodity derivatives exchanges has been taken after taking into considerations views of all stakeholders. Under the new rules, investor service committee of the exchanges will review the performance of the arbitrators annually and submit the review report to the bourse’s board.
Sebi has put in place a three-stage fee structure in order to have faster implementation of award and to discourage delayed filling of arbitrations by trading members. In case, the amount of claim is Rs 10 lakh, a fee of 1.3 per cent subject to a minimum of Rs 10,000 will be charged, if claim is filed within 6-month from the date of dispute, it will rise to 3.9 per cent subject to a minimum of Rs 30,000 if the claim is filed after 6-month or after one month of the order passed by Investor Grievance Resolution Panel (IGRP), whichever is later. After that time period, an additional fee of Rs 3,000 per month will be charged.