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

Mr. Shah's arbitration claim against a member is for an amount of Rs. 8 lakh. The exchange rules prescribe the number of arbitrators by claim size. Which general principle on this is correct?

Exchange arbitration uses a sole arbitrator for claims up to the prescribed threshold and a three-member panel for larger claims. It does not use five arbitrators for every case, the managing director, or a Rs. 1 lakh ceiling on arbitrable claims.

  1. ALower-value claims up to the prescribed threshold are heard by a sole arbitrator, while higher claims are heard by a panel of three arbitratorsCorrect
  2. BAll claims regardless of value are heard by a panel of five arbitrators
  3. CAll claims are decided by the exchange's managing director personally
  4. DA claim above Rs. 1 lakh cannot be arbitrated

Explanation

Exchange rules provide for a sole arbitrator for claims up to a prescribed threshold and a three-member panel for larger claims. Claims are not all heard by five arbitrators or the managing director, and there is no Rs. 1 lakh cap on arbitrable claims.

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