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

A client files an arbitration reference against a broker for a dispute arising from a trade. Which statement about the limitation period for filing is most appropriate?

The reference must be filed within the limitation period prescribed by the exchange, generally three years from the date of the event that caused the dispute. Claims cannot be filed indefinitely, nor are they restricted to 24 hours or to cases where the broker's registration has been cancelled.

  1. AIt must be filed within the time period prescribed by the exchange, generally three years from the date of the dispute-causing eventCorrect
  2. BIt can be filed at any time without limit
  3. CIt must be filed within 24 hours of the trade
  4. DIt can only be filed after the broker's licence is cancelled

Explanation

Exchange arbitration regulations follow the limitation principle: the reference must be filed within the prescribed period, generally three years from the event giving rise to the dispute, as in the Limitation Act. There is no unlimited window, and filing is not conditional on licence cancellation.

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