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

Ravi has a dispute with his trading member that the member has not resolved. Under the exchange investor grievance framework, what is the usual next step before the matter goes to arbitration?

The usual next step is to lodge a complaint with the exchange's investor services or grievance cell, which attempts resolution and may refer the parties to conciliation or mediation. Arbitration follows only if that fails. The SAT hears appeals against SEBI orders, not first-level broker disputes.

  1. AApproach the exchange's Investor Services Centre or grievance cell to lodge a complaint, which may be taken up for conciliation or mediationCorrect
  2. BFile an appeal with the Securities Appellate Tribunal straight away
  3. CRequest the clearing corporation to cancel the trade
  4. DAsk the depository to freeze the broker's demat accounts

Explanation

Investors first lodge a complaint with the exchange's investor services or grievance redress mechanism, which tries to resolve the matter and may offer conciliation or mediation, before arbitration. An appeal to the SAT lies against orders of SEBI or the adjudicating authority, not as a first step in a broker dispute. The clearing corporation does not cancel trades on investor request, and depositories do not freeze broker accounts for this.

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