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Sebi gets fewer complaints on average so far this year: SCORES data

Mumbai, November 8, 2022 

The number of days it takes to resolve a complaint has dropped from 36.8 days in October 2021 to 29 days as of September 2022

The stock market regulator has received fewer complaints on average so far this year, despite monthly grievances rising from their June lows.

The Securities and Exchange Board of India (Sebi) received an average of 3,011 complaints every month so far in the financial year 2022-23 (FY23), shows an analysis of data collated from the Sebi Complaints Redress System (SCORES). This is a 15.4 per cent decline over the 3,558 average monthly complaints in FY22. The average monthly figure was higher in FY21 (4,906), FY20 (4,627) and the pre-pandemic year of FY19 (3,517).

The number of investors has risen significantly since then. There are now over 100 million investor accounts compared to 40 million in FY19.

The number of days it takes to resolve a complaint has dropped from 36.8 days in October 2021 to 29 days as of September 2022. The lowest average resolution time was in April 2022 when it hit 24 days (chart 2).

The system often addresses complaints by forwarding it to the entities against which investors are filing complaints. The concerned entities are required to send a written reply to the investor and file an action taken report in the complaint platform.

The Securities Appellate Tribunal (SAT) observed in a 2019 order that....’ complaints filed on the SCORES platform has been disposed of without deciding / settling the issue that was raised in the complaints. Thus, disposal of the complaints by the respondents on the SCORES platform is no disposal in the eyes of law. It is merely an eye wash without disposing of the complaints and without settling the controversy involved in the complaints.’

“Such computer generated disposal of a serious complaint speaks volume on the conduct of the respondents in treating the minority shareholders in this shabby manner,” added the order.

The regulator had moved the Supreme Court against the order which diluted some of the observations.

“May be there was some remiss on the part of Sebi to act as a regulator, but casting aspersion was not warranted in the facts and circumstances of the case,” said the Supreme Court order.

The majority of investor complaints are against stock brokers, according to yearly data from the Sebi annual report. There were 11,261 complaints filed against stock brokers in FY22. The next biggest source of complaints were issues related to refund, allotment, dividend, transfer, bonus, rights, interest and redemption matters which accounted for 6,789 complaints. Registrars to an issue and share transfer agents were the source of 3,877 complaints; mutual funds were next with 3,866 complaints; followed by depository participants with 3,794 complaints.

“Of the 42,694 new complaints received during 2021-22, 37,425 complaints (or 87.2 per cent of the total complaints) were e-complaints, while remaining 5,460 complaints (or 12.8 per cent complaints) were physical complaints,” noted the 2021-22 Sebi annual report.

The largest number of complaints were received at the head-office and accounted for nearly half the investor complaints received. The northern region (which includes Delhi and others) was second and accounted for nearly a fifth of complaints. This was followed by the western region (14 per cent) excluding Daman and Diu as well as Maharashtra and including states like Gujarat and Rajasthan. The remaining complaints came from the southern and the eastern regions.

[The Business Standard]

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