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

Ravi has a dispute with his broker over a trade. Which of the following is the usual first step in the exchange-based investor grievance mechanism before approaching arbitration?

The usual first step is to lodge a complaint with the exchange's investor services mechanism, which tries to resolve the matter and offers conciliation. Only if this fails does the investor proceed to arbitration; SAT and courts come much later and are not first-stage remedies.

  1. AFiling a complaint with the exchange's investor services centre, which seeks resolution or conciliationCorrect
  2. BDirectly filing an appeal before the Securities Appellate Tribunal
  3. CFiling a writ petition with the Supreme Court
  4. DRequesting the clearing corporation to cancel the trade

Explanation

Investors normally first lodge a complaint with the exchange (or via SCORES), and the exchange attempts resolution and offers conciliation or mediation. Arbitration follows if the dispute is not resolved. An appeal to SAT arises only against SEBI orders or arbitration-related regulatory orders in the later stages, not as the first step.

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