How Sebi’s new dispute redressal mechanism empowers investors

livemint.com:

Why ODR? SCORES, which is largely used by investors seeking redressal of complaints against stock brokers, is a comprehensive redressal system, which allows investors to escalate their complaint (see graphic) in a time-bound manner. In the final stage, the complaint is reviewed directly by Sebi and an investor who is not satisfied by Sebi’s review can now opt for ODR. Earlier, the IGRC resolved disputes between stock brokers, depository participants, commodity brokers and their clients.

Last year, Sebi expanded this list to include listed companies and registrar & share transfer agents (RTAs). ODR widens the ambit of intermediaries. As Sebi’s recent consultation paper on ODR points out, the existing dispute resolution process under this framework is “largely a physical process making it relatively costly, time-consuming".

To be sure, most of IGRC’s mediation proceedings had moved online during the pandemic. This is set to continue under ODR. The ODR mechanism aims to expand the ambit of the dispute resolution process by including alternate investment funds (AIFs), collective investment management company, investment advisors, InvITs (infrastructure investment trust), mutual funds (including distributors of these fund), portfolio managers (PMS), Reits (real estate investment trusts), research analysts and commodity clearing corporations.