CIRCULAR
SEBI/HO/OIAE/OIAE_IAD-3/P/CIR/2023/191 December 20, 2023
To,
All Recognized Stock Exchanges (including Commodity Derivatives)
All Clearing Corporations
All Depositories
All Stock Brokers
All Depository Participants
All SEBI Registered Intermediaries / All SEBI Regulated Entities
All Listed Companies
All Registrar & Share Transfer Agents
All Asset Management Companies
Sir / Madam,
Subject: Amendment to Circular dated July 31, 2023 on Online Resolution of
Disputes in the Indian Securities Market
1. SEBI issued circular no. SEBI/HO/OIAE/OIAE_IAD-1/P/CIR/2023/131 dated July 31,
2023 providing the guidelines for online resolution of disputes in the Indian securities
market. Amendments cum Corrigendum to the same was issued vide circular no.
SEBI/HO/OIAE/OIAE_IAD-1/P/CIR/2023/135 dated August 04, 2023. These regulatory
norms were consolidated vide Master Circular No. SEBI/HO/OIAE/OIAE_IAD-
1/P/CIR/2023/145 dated August 11, 2023.
2. Pursuant to feedback received for providing clarity on certain aspects, it has been decided
to modify the circular dated July 31, 2023 (as amended) as under:
I. In clause 2 of the circular, the words and brackets “(including institutional/corporate
clients)” are added after the words “Investors/Clients”.
II. In Clause 3(b) of the circular, the words ‘independent institutional’ are added before
the word ‘conciliation’ and the word ‘online’ as appears before the words ‘arbitration
institution in India’ is substituted with the word ‘independent’.
III. In Clause 3(b) of the circular, after the end of the existing paragraph, the following is
added:
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“The seat and venue of mediation, conciliation and/or arbitration shall be in India and
can be conducted online.
The fees, charges and costs for the independent mediation institution or independent
conciliation institution and/or independent arbitration institution (and of the
mediators/conciliators/arbitrators), and other applicable costs, charges and expenses
may be as prescribed by such institution/s or as agreed upon by the parties with such
institution/s.
The claims / complaints / disputes that arise from the activities or roles performed or
to be performed by the specified intermediaries or regulated entities pertaining to the
Indian securities market are in scope of this clause1.”
IV. Clause 5 of the circular shall include the following as a footnote to ‘ODR Portal’:
URL - https://smartodr.in/login
V. Clause 8 of the circular shall include the following after the end of the last line: “Entities
that obtain registration from the Board as an intermediary or issuers that are getting
their securities listed on or after the date of implementation of this circular, shall enrol
in the ODR Portal immediately upon grant of registration or listing, as the case may
be”.
VI. In Clause 13 of the circular, the following are added at the end of the line: “or is against
the Government of India / President of India or a State Government / Governor of a
State. It is clarified that Listed companies (and their registrars and transfer agents),
specified intermediaries and regulated entities specified in Schedules A and B as well
as institutional or corporate clients shall initiate claims or disputes in accordance with
Clause 3(a) and/or 3(b), as applicable, unless the matter is non-arbitrable in terms of
Indian law (including when moratorium under the Insolvency and Bankruptcy Code is
in operation due to the insolvency process or if liquidation or winding up process has
been commenced) or is against the Government of India / President of India or a State
Government / Governor of a State.”
VII. In Clause 20(a) of the circular, at the end of the current paragraph, the following
sentence is added: “The nature of determination made by the conciliator is only to
provide an admissible claim value of the complaint / dispute for purposes of
appropriate slab for computation of fees being applied for online arbitration. Subject
to the forgoing, the investor / client, the market participant and the arbitrator/s would
not be bound by such determination for the making or defending or deciding the claim
/ complaint / dispute, as the case may be”.
1 For example, non-disclosure agreements signed by specified intermediaries or regulated entities with
their institutional or corporate clients for receiving confidential corporate or other information by itself would
not be related to the Indian securities market. Separately, regulated entities such as Credit Rating Agencies
or Debenture Trustees also undertake non-securities market related work which would be outside the scope
of the clause
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VIII. In Clause 20(b) of the circular, at the end of the current paragraph, the following
sentence is added: “The Market Participant against whom the investor/client pursues
the online arbitration shall participate in the arbitration process. Accordingly, within 10
days of the initiation of the online arbitration by the investor/client, the Market
Participant shall make the deposit of 100% of the admissible claim value with the
relevant MII and make the payment of the fees as applicable for online arbitration.
Non-adherence of the foregoing by the Market Participant may result in action against
the Market Participant by MIIs and/or the Board.”
IX. In Clause 20(c) of the circular, the first sentence is substituted as follows: “In case the
Market Participant wishes to pursue online arbitration (which will be administered by
the ODR Institution which facilitated the conduct of conciliation), it shall intimate
the ODR Institution within 10 days of the conclusion of the conciliation process of its
intent to do so and within further 5 days of this intimation, shall deposit 100% of the
admissible claim value with the relevant MII and make the payment of fees as
applicable for online arbitration for initiating the online arbitration”.
X. In Clause 28(c) of the circular, the slab ‘Above Rs. 50 lakh’, stands modified as follows:
Above Rs. 50 lakh – Rs. 1 crore
Arbitrator’s Fee Rs. 1,20,000/-**
ODR Institution’s Fees, in addition to the Rs. 15,000/-
arbitrator’s fees (to be collected by the
ODR institution)
Applicable GST, Stamp Duty, etc. on
actual outgoings
Further, for claims of Rs. 1 crore and above, an ad valorem fees @ 1% of the claim
value or Rs.1,20,000/-, whichever is more, towards Arbitrator’s Fees** (to be collected
by the ODR institution and paid to the arbitrator) and fees @ Rs 35,000/- towards
ODR Institution’s Fees, in addition to the arbitrator’s fees (to be collected by the ODR
institution), together with Applicable GST, Stamp Duty, etc. on actual outgoings, shall
be applicable.
XI. In Clause 28 (c) of the circular, at the end of the first paragraph appearing after the
table, the following sentence is added: “The investor may choose to initiate arbitration
for a higher claim value subject to payment of applicable fees and charges”.
XII. In Clause 28 (c) of the circular under ‘Late Fee’, after the last line, the following is
added: “……The concerned ODR Institution may collect this fee on behalf of the MII
as per mutually agreed terms between them.”
XIII. Schedule A of the circular shall also include the following:
1 A. Banker to an Issue and Self-Certified Syndicate Banks2
2 including for any claims / complaints / disputes pertaining to compensation to investors for grievance
emanating from application to Public Issues using UPI payment with ASBA.
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5 A. Merchant Bankers3
Further, entry 2A and 10 are modified as under:
2A. Commodities Clearing Corporation4
10. Stock brokers5 (including Online Bond Platforms & Online Bond Platform
Providers)
XIV. Schedule B of the circular shall also include the following:
1A. Commodities Clearing Corporations6
5A. ESG Ratings Providers and their clients
3. This circular shall come into force with immediate effect.
4. This Circular is issued in exercise of powers conferred under Section 11(1) of the
Securities and Exchange Board of India Act, 1992 to protect the interests of investors
in securities and to promote the development of, and to regulate the securities market.
This circular is issued with the approval of the competent authority.
5. This Circular is available on the SEBI website at https://www.sebi.gov.in/ under the link
“Legal > Circulars”. The Master Circular for Online Dispute Resolution is available on
the SEBI website at www.sebi.gov.in under the link “Legal> Master Circulars”.
Yours faithfully,
S. Manjesh Roy
General Manager
Tel no.: 022- 2644 9710 & 4045 9710
Email: manjeshsr@sebi.gov.in
3 For any claims/complaints/disputes arising on account of compensation to investors for grievances
emanating from application for public issues.
4 Including for any claims / complaints / disputes raised by investors/clients on account of Warehouse
Service Providers / Vault Service Providers
5 Including for any claims/compalints/disputes arising on account of Authorised Persons of the Trading
Members
6 For any claims / complaints / disputes arising between or amongst Warehouse Service Providers / Vault
Service Providers and depositors / ginners.
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