Sebi asks stock brokers to disclose investors charter, compliant data on websites

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Markets regulator Sebi on Thursday asked stock brokers to disclose investors charter as well as data pertaining to complaints they received on their websites. The new guidelines will come into effect from January 1, 2022, the Securities and Exchange Board of India (Sebi) said in a circular.

In order to facilitate investor awareness about several activities which an investor deals with such as opening of account, KYC and in-person verification, process for dematerialisation and complaint resolution, Sebi, in consultation with the market participants, has prepared an investor charter for stock brokers. This charter specified about rights of investors, various activities of stock brokers with timelines, dos and don'ts for investors and grievance redressal mechanism.

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In this regard, exchanges have been directed to advise stock brokers to bring the investor charter for stock brokers to the notice of their clients — existing as well as new ones — through disclosing the investor charter on their respective websites, making them available at prominent places in the office, provide a copy of the charter as a part of account opening kit to the clients, through e-mails or letters etc. Additionally, in a bid to bring about transparency in the investor grievance redressal mechanism, Sebi has asked brokers to disclose on their respective websites, the data on complaints received against them and redressal thereof.

The data needs to be disclosed latest by 7th of succeeding month, Sebi said. In addition, the regulator has also prescribed a format for disclosing data of complaints on their websites.

Under the disclosure, brokers will have to disclose about complaints received during the month, those carried forward from previous month, complaints pending for more than three months, complaints resolved and average time taken in resolution of a complaint, among others. Earlier, Sebi had asked depositories, Registrar and share transfer agents (RTAs) and merchant bankers to disclose on their websites, the investor charter for a bunch of categories.

Besides, it had directed exchanges, depositories and clearing corporations to disclose on their websites, the data on complaints received against them and redressal thereof. This came after Sebi regulator came out with investor charter in November. This charter includes the rights and responsibilities of investors, and dos and don'ts of investing in the securities market.

The charter is aimed at protecting the "interests of investors by enabling them to understand the risks involved and invest in a fair, transparent, secure market, and to get services in a timely and efficient manner". The rights include getting fair and equitable treatment, expecting redressal of investor grievances filed in SCORES in a time bound manner.

Also, the market regulator created a separate investor charter for market infrastructure institutions– stock exchanges, clearing corporations and depositories.