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NISM-Series-VII: Securities Operations and Risk Management · Investor Grievances and Arbitration

Investor Grievance Redressal Mechanism for NISM Series VII

Updated 11 October 2026 · Fact-checked

The investor grievance redressal mechanism is the escalation path for complaints against brokers, depository participants and listed companies. You complain to the entity first. If unresolved, you escalate to the exchange or depository, and then to SEBI through SCORES. Exam questions test the order of these stages and who handles what.

Understand Investor Grievance Redressal Mechanism

An investor can have a dispute with a stock broker, a depository participant (DP) or a listed company. The system is built so that the party closest to the problem gets the first chance to fix it. Higher bodies step in only when that fails.

The first stage is the entity itself. A broker, DP or company must have a way to receive complaints and respond. This is the cheapest and fastest route, and it is where the investor should always start.

The second stage is the market infrastructure body. For a broker, this is the stock exchange where the broker is a member. For a DP, this is the depository (NSDL or CDSL). For a listed company, the exchanges where it is listed follow up on the complaint. These bodies have investor service centres and grievance committees, and they can take up the complaint with the member or company.

The third stage is SEBI. SEBI runs SCORES (SEBI Complaints Redress System), a web-based system where investors lodge complaints and track their status online. The entity must file an action taken report on the system. Under the current framework (SCORES 2.0), the investor is expected to approach the entity first, and the entity gets a fixed time to respond before the matter is escalated. Check the exact day count in your latest workbook.

A complaint is different from a dispute that needs a ruling. When a claim or difference with a broker cannot be settled by redressal, the investor can go to arbitration at the exchange, followed by appeal. These are covered in their own topics. For this topic, remember the ladder: entity, then exchange or depository, then SEBI through SCORES.

Key formulas to remember

Escalation ladder for a broker complaint
Broker → Stock exchange (investor service centre / grievance committee) → SEBI SCORES
Investor goes to the broker first. Unresolved matters go to the exchange where the broker is a member.
Escalation ladder for a DP complaint
Depository participant → Depository (NSDL / CDSL) → SEBI SCORES
The depository handles complaints against its own DPs.
Escalation ladder for an issuer complaint
Company (compliance officer / registrar) → Stock exchange where listed → SEBI SCORES
Exchanges follow up on complaints against listed companies.
What SCORES is
SCORES = SEBI Complaints Redress System (web-based, centralised)
Investor lodges and tracks the complaint online. The entity uploads its action taken report.
Redressal versus arbitration
Redressal = complaint resolution; Arbitration = formal dispute resolution
Arbitration is a separate, later remedy at the exchange. Do not treat it as the first step.

How to solve Investor Grievance Redressal Mechanism questions

Use this method for any question on who the investor approaches and in what order.

  1. 1Identify the party the complaint is against: broker, DP or listed company.
  2. 2Identify the first-level body. It is always the entity itself, unless the question says the investor already tried it.
  3. 3Identify the second-level body: the exchange for a broker or company, the depository for a DP.
  4. 4Identify the final complaint-level body: SEBI through SCORES.
  5. 5Check whether the question is about a complaint or a claim needing a ruling. If it is a dispute needing a ruling, think arbitration.
  6. 6Match the answer to the stage. Ask: has the earlier stage already been tried?
  7. 7Eliminate options that skip stages or that name the wrong body, such as a depository for a broker complaint.

Quickest way: Party, then ladder

When to use it: Use it for any MCQ asking where a complaint goes or what comes next.

  1. Name the party: broker, DP or company.
  2. Write the ladder in your head: entity, exchange or depository, SEBI SCORES.
  3. Find the stage the investor has already completed.
  4. Pick the next rung. Drop any option that skips it.

Common mistakes in Investor Grievance Redressal Mechanism

  • Sending a complaint against a DP to the stock exchange.

    Students mix up exchanges and depositories because both are market infrastructure.

    Fix: Link the pairs: broker with exchange, DP with depository, company with exchange where listed.

  • Thinking SEBI is the first place to complain.

    SCORES is well known, so students assume it is the starting point.

    Fix: Remember that the investor approaches the entity first. SCORES is for unresolved complaints.

  • Treating arbitration and grievance redressal as the same thing.

    Both deal with investor disputes, so the terms blur.

    Fix: Redressal is complaint handling. Arbitration is a separate formal process at the exchange for disputes.

  • Believing SCORES is only for complaints against brokers.

    Study notes often use brokers as the example.

    Fix: SCORES covers complaints against listed companies, intermediaries and other regulated entities.

  • Quoting a timeline from memory without checking it.

    Timelines have changed over time as SEBI revised the system.

    Fix: Learn the timeline in your current NISM workbook. Do not assume an older figure is still valid.

Worked examples

Example 1

An investor has a complaint against a depository participant, and the DP has not resolved it. Which body should the investor approach next, before SEBI?

A. The stock exchange where the investor trades
B. The depository with which the DP is registered
C. The clearing corporation
D. The investor's bank

Show the solution
  1. The complaint is against a DP, so identify the matching infrastructure body.
  2. A DP is an agent of a depository, so the depository supervises it.
  3. The DP has already failed to resolve the complaint, so the first stage is done.
  4. The next stage is the depository, and only after that SEBI SCORES.
  5. The exchange and clearing corporation handle broker and clearing matters, not DP complaints.

Answer: B. The depository with which the DP is registered.

Example 2

Which statement about SCORES is correct?

A. It is operated by stock exchanges for member complaints only
B. It is a web-based system run by SEBI where investors lodge and track complaints
C. It replaces arbitration for all disputes
D. It accepts complaints only against depositories

Show the solution
  1. SCORES stands for SEBI Complaints Redress System, so it is run by SEBI, not exchanges. A is wrong.
  2. It is a web-based, centralised system where the investor can lodge a complaint and follow its status. B fits.
  3. It handles complaints. Arbitration is a separate remedy and is not replaced. C is wrong.
  4. It covers several types of entities, not only depositories. D is wrong.

Answer: B. It is a web-based system run by SEBI where investors lodge and track complaints.

Exam tips

  • Most questions test the order of stages. Memorise the three ladders for broker, DP and company.
  • Watch for options that skip the entity-level stage. These are usually wrong.
  • Match each party with its supervising body: broker with exchange, DP with depository.
  • Wrong answers cost 25% of the marks assigned to the question in NISM-Series-VII. If you cannot rule out options, think before guessing.
  • If a question asks for a day count, rely on the latest workbook, not on old notes.

Practice questions from Investor Grievances and Arbitration

Investor Grievance Redressal Mechanism in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Investor Grievance Redressal Mechanism: frequently asked questions

How do I file a complaint against a stock broker in India?

First complain to the broker in writing and keep a record. If it is not resolved, approach the stock exchange where the broker is a member. You can also lodge the complaint on SEBI SCORES and track it online.

What is SEBI SCORES?

SCORES is SEBI's web-based Complaints Redress System. Investors lodge complaints against listed companies and regulated intermediaries and follow the status online. The entity has to respond with an action taken report.

Where do I complain about a depository participant?

Start with the DP. If the DP does not resolve it, approach the depository with which it is registered, NSDL or CDSL. After that, you can use SEBI SCORES.

Is arbitration part of the grievance redressal mechanism?

Arbitration is a separate remedy for disputes that redressal cannot settle. It is available through the stock exchange. Study it as a later step, not the first one.