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Investor Grievances
Investor Grievances
BSE has established a Department of Investors Services (DIS) to redress investors' grievances. Since its establishment in 1986, the DIS has played a pivotal role in enhancing and maintaining investors' faith and confidence by resolving their grievances either against listed companies or against BSE's Trading Members. The services offered by DIS are as under:
(a) Investors' Grievances against Listed Companies
Investors' complaints against listed companies are forwarded by BSE to the concerned companies, with a copy sent to the complainant. The investors are advised to inform BSE if the complaints are not resolved within 45 days. If a company fails to redress the complaint within 45 days, a reminder is sent,BSE then personally follows-up with the companies and / or their Registrar & Transfer Agents, to resolve such complaints. If the total number of pending complaints against a company exceeds 25 and remain unresolved by the company for more than 45 days, then steps are initiated by BSE to suspend trading in the securities of the company till the complaints are resolved. BSE may also transfer such scrips to, "Z" Group.
A "Z" category company indicates that it has not complied with various provisions of the listing agreement including non-resolution of investors' complaints. Through creation of "Z' category, BSE cautions investors to be more careful in their investments in such companies.
Investors are expected to submit their complaints in the prescribed Complaint format
Visit of Registrar & Transfer Agents to BSE
BSE regularly organizes visits of Registrars & Transfer Agents (RTAs) to its office to allow Members and investors to have direct interface with them for redressal of complaints against companies listed on BSE. For forthcoming schedule, click here.
(b) Investors' Grievances against BSE's Trading Members
Investors are expected to submit their complaints in the prescribed Complaint Form
The complaints of investors against BSE's Trading Member's are forwarded to the concerned Trading Members for resolution within 7 days. In case no reply is received from the Trading Members or the reply received from the Trading Member does not redress the complaint, the same is placed before Investors' Grievances Redressal Committee (IGRC) where both the disputing parties, i.e. investor and the concerned Trading Member are requested to present their case. IGRC attempts to redress the complaint through conciliation and by finding amicable solutions acceptable to both parties. The outcome of the meeting of IGRC is recorded in the minutes form, a copy of which is given to both the parties. In case a Trading Member fails to implement the said minutes of the IGRC, necessary disciplinary action against it is initiated by BSE.
Investor Protection Fund
In accordance with the guidelines issued by the Ministry of Finance, Government of India, BSE set up an Investor Protection Fund (IPF) on July 10, 1986 to meet the claims of investors against defaulter Members.
IPF is managed by the Trustees appointed by BSE.
The Fund corpus is created as follows:
The Members contribute Re.0.01 per Rs.1 lakh of gross turnover, which is debited to their General Charges Account.
BSE contributes, on a quarterly basis, 1% of the listing fees collected by it.The entire interest earned by BSE on 1% security deposit kept with it by companies making public/rights issues is credited to the Fund.
As per the SEBI directive, auction proceeds that have been impounded in certain cases where price manipulation / rigging was suspected are transferred to the Fund.
The surplus lying in the account of the defaulters after meeting their liabilities on BSE is released to them after transferring 5% of the surplus amount to this Fund.
As at the end of June 2008 (30/06/2008), the corpus of IPF was Rs.370 crore.
Compensation Policy
The maximum amount presently payable to an investor from this Fund in the event of a default by a Member is Rs.10.00 lakhs. (This has been progressively raised by BSE from Rs.10,000.00 in 1988 to the present level and is now among the highest in the country).
The arbitration Award obtained by investors against defaulters are scrutinized by the Defaulters Committee, a Standing Committee constituted by BSE, which may recommend to the Trustees of the Fund for release of the awarded amount or Rs.10.00 lakhs, whichever is lower. After the approval of the Trustees of the Fund, the amount is disbursed to the investors from the Fund.
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