Gaps in Sebi dispute resolution plan: Experts

The paper also attempts to draw a line between contractual and regulatory disputes

- Neha Joshi

Legal and market experts warn against the unintended consequences of the market regulator's proposal to tweak the framework for Online Resolution of Disputes (ODR) in the Indian securities market.

In a 21 April consultation paper, the Securities and Exchange Board of India (Sebi) proposed overhauling the way securities market disputes are resolved, promising faster timelines, stricter accountability, and direct arbitration.

Sebi has proposed to extend the ODR portal, which previously applied to market infrastructure institutions (MIIs) such as stock exchanges and clearing corporations, to depositories.

If the proposal goes through, the regulator has asked the MIIs to jointly develop a standard operating procedure (SOP) for the operational aspects, like filing procedure, payment mechanism, etc., for the common ODR portal within two months of the circular coming into effect.

In a major change, the regulator has proposed to offer a direct arbitration mechanism for resolving disputes in certain cases with claims of ₹10 crore or more and those with legal or technical defects. The new mechanism seeks to bypass lodging a grievance with the market participant concerned and escalate it to Sebi's SCORES platform if unresolved.