Scores - SEBI Complaints Redress System

In continuation to what was seen as a transition towards the speedy and effective redressal of investor’s complaints, the market regulator Securities and Exchange Board of India (SEBI) came up with its circular vide CIR/OIAE/1/2013 dated April 17, 2013 (Circular) mandating the redressal of investors grievances through SCORES.

The Preamble of the Securities and Exchange Board of India describes the basic functions of the Securities and Exchange Board of India as to protect the interests of investors in securities and to promote the development of, and to regulate the securities market and for matters connected therewith or incidental thereto.

To protect the interest of investors, SEBI has commenced processing of investors complaints in a centralized web based complaints redress system ‘SCORES’ i.e. Sebi Complaints Redress System from June, 2011. The salient features of this system are:

a. Centralised database of all complaints.

b. Online movement of complaints to the concerned listed companies.

c. Online upload of Action Taken Reports (ATRs) by the concerned companies; and

d. Online viewing by investors of actions taken on the complaint and its current status.

There will be occasions when stakeholders have a complaint against a listed company or intermediary registered with SEBI. In the event of such complaint the complainant should have to first approach the concerned company or intermediary against whom there is a complaint. However, the complainant may not be satisfied with their response. Therefore, complainants should know whom they should turn to, to get there complaint redressed.

SEBI takes up complaints related to issue and transfer of securities and non-payment of dividend by the listed companies. In addition, SEBI also takes up complaints against the various intermediaries registered with it and related issues.

SCORES facilitates complainants to lodge there complaint online with SEBI and subsequently view its status.

Let us see the brief insight about the processing of complaints by SEBI under the SCORES:-

1. Following complaints are dealt by SEBI through the SCORES:-

Complaints arising out of issues that are covered under-

a. Securities and Exchange Board of India Act, 1992.

b. Securities Contract (Regulation) Act, 1956.

c. Depositories Act, 1996 and rules and regulation made there under and

d. Provisions that are covered under section 55A of Companies Act, 1956.

2. Following matters are not considered as complaint in SCORES:-

a. Complaints those are incomplete or not specific.

b. Allegations without supporting documents.

c. Offering suggestions or seeking guidance or explanation.

d. Seeking explanation for non-trading of shares or illiquidity of shares.

e. Not satisfied with trading price of the shares of the companies.

f. Non-listing of shares of private offer.

g. Disputes arising out of private agreement with companies or intermediaries.

3. Following complaints are not dealt by SEBI through SCORES:-

a. Complaints against unlisted, delisted, wound up, liquidated or sick companies.

b. Complaints that are sub-judicial (i.e. relating to cases which are under consideration by court of law, quasi-judicial proceedings etc.)

c. Complaints falling under the purview of other regulatory bodies such as-

- Reserve Bank of India (RBI),

- Insurance Regulatory and Development Authority of India (IRDA),

- Pension Fund Regulatory and Development Authority (PFRDA),

- Forward Market Commission (FMC),

- Competition Commission of India (CCI) etc., or

- Under the purview of other ministries viz., Ministry of Corporate Affairs (MCA), etc.

The relevant Regulators or Authorities for some of the grievances which are not dealt by SEBI through the SCORES are as under:-

4. Procedure for registration of complaint online on SCORE:-

A complaint can be register online on SCORES portal, by click on “Complaint Registration” under “Investor Corner”. The complaint registration form contains personal details and complaint details. There are certain mandatory fields on the Form. These fields include Name, Address for correspondence, State, e-mail Address of Investor. Besides this, the complaint category, entity name, nature of complaint related to, complaint details in brief (up to 1000 characters) etc. are the other fields. A pdf document (up to 1 MB of size for each nature of complaint) can also be attached along with the complaint as the supporting document.

On successful submission of complaint, system generated unique registration number will be displayed on the screen which may be noted for future correspondence. An e-mail acknowledging the complaint with complaint registration number will also be sent to the complainants e-mail id entered in the complaint registration form.

A complaint can be lodge on the company which is in the process of listing in “Prelisting/Offer document” category under Listed Companies menu on the SCORES.

While filing the form certain characters are not accepted for security reasons. However, the characters which are permissible are mentioned against each field while lodging the complaint. In case certain non-usable characters are entered, then a clear explicit error message will be displayed.

In case, the complainants are not able to register complaints online, they can send their complaints through post to the SEBI concern office whose addresses are given under the menu “Contact Us” on the homepage.

5. Status of the Complaint:-

Status of the complaint can be check by, click on “View Complaint Status” under “Investor Corner” on the homepage

Step 1: Provide the complaint registration number which was allotted at the time of registration of the complaint.

Step 2: Enter the password:

a. In case of web complaint, e-mail address is the password.

b. In case of physical complaints sent to SEBI, enter the password which was communicated by SEBI in the acknowledgement letter.

On verifying the correctness of registration number, password and security code, the current status of the complaint is displayed.

There can be a single password for all web complaints i.e. e-mail id. Also, if the complainants are becomes a registered users, they can get a single password.

In case of registered users personal details need not be entered for every new complaint once they becomes a registered users. Registered users can also track status of all complaints (including previous complaints that were lodged with same e-mail id) with a single login.

6. Reminder for Complaints:-

A reminder for an earlier lodged complaint can be send by clicking on the link “Send Reminder” under “Investor Corner” on the homepage. Details like Registration number, Reminder details and the security code required to be provided for the same.

7. Complaint about market or price manipulation or violation of insider trading regulations:-

Complaint about market or price manipulation or violation of insider trading regulations can be lodged under, “Information to SEBI”.

However, status of that complaint cannot be disclosed since SEBI conducts examinations and investigations confidentially. As a result, SEBI will neither confirm nor deny the existence of any investigation. Any regulatory actions taken by SEBI are published at SEBI website at www.sebi.gov.in after the proceedings are completed.

8. Handling of complaints by SEBI under SCORES:-

SEBI examines the complaint and decides whether the subject matter falls under the purview of SEBI and whether it needs to be referred to concerned entity. After examination, SEBI forwards the complaint to the concerned entity with an advice to send a written reply to the complainant and upload an action taken report (ATR) on SCORES.

9. Timeline to get complaint resolved:-

All companies, against whom complaints are pending on SCORES, shall take appropriate necessary steps within 7 days of receipt of complaint through SCORES, so as to resolve the complaint within 30 days of receipt of complaint and also keep the complainant duly informed of the action taken thereon. Entities are required to submit the action taken report (ATR) within a reasonable period but not later than 30 days.

On receipt of satisfactory action taken report along with supporting documents, if any, from the entity or the concerned Stock Exchange or Depository, or if the complainant fails to give complete details or documents required for redressal of the complaint within the prescribed time, the complaint is treated as disposed of.

In case the complainant is not satisfied with the disposal of the complaint, a fresh complaint can be lodged or an e-mail can be sent to the concerned Dealing Officer or escalate the complaint by sending an e-mail to Senior Officers. Further, appropriate legal proceedings against the entity can be initiated.

10. Limitations in dealing with the complaint under SCORES:-

A complaint is successfully resolved when the entity was advised to send reply to the complainant. But in certain cases, the entity or company denies wrongdoing, and it remains unclear as to who is wrong or whether any wrongdoing occurred at all. If this happens, SEBI cannot act as a judge or an arbitrator and force the entity or company to resolve the complaint. Further, SEBI cannot act as a personal representative or attorney of the complainant. The law allows the complainants to take legal action on their own decision.

While the entity is directly responsible for redressal of the complaint, SEBI initiates action against disobedient entities on the grounds of their failure to redress large number of investor complaints as a whole.

11. Complaint or suggestions in respect of SCORES:-

There can be an occasion that there may be complaint in respect of SCORES itself. In such case stakeholders may contact with the SEBI office on telephone no.022-26449188 /9199 or may send the complaint or suggestions physically by post to the concerned Office of SEBI.

Concluding comments:-

As already provided, all the listed companies are required to resolve the complaints of the investors through SCORES, an online complaint redressal system of the SEBI. Investor confidence is imperative for good governance. Redressal of investor grievances both by letter and spirit is the foundation on which the company’s ethical standards are built.

The initiative taken by SEBI as an apex regulatory body of the capital market regarding the redressal of the investor’s complaints through SCORERS has facilitate speedy disposal of complaints. SCORES a green initiative of SEBI helps building investors confidence in the capital market.

The recent circular issued by SEBI is amply cleared that all listed companies have to obtain SCORES user-id and password so as to resolve the investor’s complaints through SCORES. The requirements of the circular are an ambitious step of SEBI towards the protection of interest of the investors in the capital market. However, the success of such an initiative needs to be seen.

(www.scores.gov.in)

By Mr. Avinash Godse

MRV Associates, Company Secretaries, Pune

Email_id: godse.avi@gmail.com

(As published in “Sanhita June, 2013 edition” ICSI WIRC Pune Chapter new latter)