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

An investor is dissatisfied with an arbitration award passed by the arbitrators at the exchange. Which of the following correctly describes the next remedy available under the exchange mechanism?

The aggrieved party can file an appeal before the exchange's appellate arbitral panel within the prescribed time. The mechanism is two-tier, and only afterwards can parties go to court under the Arbitration and Conciliation Act. Depositories or clearing members do not reverse awards.

  1. AFile an appeal before the appellate arbitral panel of the exchange within the prescribed timeCorrect
  2. BApproach the clearing member for a fresh trade
  3. CRequest the depository to reverse the award
  4. DNo remedy of any kind exists

Explanation

The exchange framework provides a two-tier process: the first arbitration award can be challenged by an appeal before the appellate arbitral tribunal of the exchange within the time limit. Thereafter, recourse is under the Arbitration and Conciliation Act through courts. Depositories and clearing members have no role in reversing awards.

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