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

A client of a trading member has a dispute with the broker over a trade. The client is dissatisfied with the arbitration award passed by the first arbitral panel. What is the next recourse available under the exchange arbitration mechanism?

The aggrieved party can appeal to the appellate arbitration panel of the exchange within the prescribed time. A fresh arbitration before the same panel is not allowed, and neither the clearing corporation nor the depository has power to review or set aside an arbitration award.

  1. AAppeal before the appellate arbitration panel of the exchangeCorrect
  2. BFile a fresh arbitration before the same panel
  3. CApproach the clearing corporation for review of the award
  4. DRequest the depository to set aside the award

Explanation

Under the exchange arbitration mechanism, a party aggrieved by the first arbitration award may file an appeal before the appellate arbitration panel within the prescribed time. The same panel cannot rehear the matter, and clearing corporations or depositories do not review awards.

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