Sebi issued a circular on Thursday on ‘Investor grievances redressal mechanism’ defining the process of complaint management by listed companies and stock exchanges. According to the circular, stock exchanges shall levy a fine of ₹1,000 per day per complaint on the listed entity for failure to redress investor complaints within stipulated time. The depositories can even freeze the entire shareholding of promoters in case of non-compliance.
These guidelines will come into force on September 1.
Sebi, in its circular said that the companies are expected to resolve investors complaints within 30 days from the receipt of such complaint. In case the company fails to do so, such direct complaints shall be forwarded to Designated Stock Exchange (DSE) through SCORES.
SCORES is Sebi’s online complaint redressal system.
The circular said, for any failure to redress investor grievances pending beyond 60 days by listed companies, stock exchange shall levy a fine of ₹1,000 per day for non redressal of complaint.
In case if the listed company fails to pay the penalty and/or resolve the complaint within 15 days, the stock exchange can send a reminder to allow 10 more days to do the needful.
If the company still fails to submit an Action Taken Report (ATR), the depository shall immediately freeze the promoters’ demat acounts, said the circular.
Here is the timeline for handling of complaints by the listed entities and actions in case of non-compliance, as per the Sebi circular.
Stock exchanges will not handle complaints pertaining to dividend and securities transferred to IEPF, pension funds, monopoly and anti-competitive practices, chit funds, insurance companies, housing finance companies, companies where moratorium order is passed against the company in winding up/ insolvency proceedings and Companies under liquidation and official liquidator has been appointed.