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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 trading member for a dispute arising from a trade. Which statement about the time limit for filing is correct under the exchange arbitration framework?

The reference must be filed within three years from the date of the event giving rise to the dispute, consistent with the limitation law applied by exchange arbitration rules. There is no unlimited window, and a one-day or ten-year period is not the prescribed limit.

  1. AThe reference must be filed within three years from the date of the dispute-giving event, subject to the limitation lawCorrect
  2. BThere is no time limit for filing arbitration
  3. CThe reference must be filed within one day of the trade
  4. DThe reference can be filed only after ten years

Explanation

Exchange arbitration rules require the reference to be filed within the limitation period under the Limitation Act, which is three years from the occurrence of the cause of dispute. Having no limit, one day, or ten years is inconsistent with that rule.

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