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NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Grievance Redress Mechanism

Mr. Iyer, a client of a registered investment adviser, alleges that the adviser sold him a product without disclosing a conflict of interest. He wants to raise a complaint. Which of the following best describes the adviser's obligation regarding grievances?

The adviser must maintain an effective internal grievance redress mechanism and deal with client complaints promptly, keeping records. It cannot ignore complaints on arbitrary grounds, restrict them to in-person filing, or need to refer each one to SEBI first.

  1. AThe adviser should have an effective internal grievance redress process and address complaints in a timely mannerCorrect
  2. BThe adviser may ignore complaints that are older than one month
  3. CThe adviser must only respond to complaints made in person
  4. DThe adviser is required to refer every complaint to SEBI before replying

Explanation

Registered advisers are expected to maintain an internal mechanism to receive and resolve client complaints promptly and keep records. They cannot arbitrarily ignore complaints or limit them to in-person filing, and they need not forward each complaint to SEBI before responding.

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