SEBI directive to BSE on review of grievance redressal mechanism at Stock Exchanges for clients of defaulting trading members
November 17, 2020: BSE has received a letter dated November 13, 2020 from SEBI whereby SEBI has informed that in order to enhance the effectiveness of Investor Protection Fund (IPF) of Stock Exchanges, SEBI has comprehensively reviewed the existing framework in consultation with the Stock Exchanges. Based on the review, SEBI has decided to revamp the grievance redressal mechanism at Stock Exchanges w.r.t. to clients of defaulting Trading Members (TMs). Accordingly, SEBI has directed BSE to:
1. Conduct annual review to ascertain the adequacy of the IPF Corpus of the Exchange.
2. Disclose the IPF Corpus on its Website and update the same on a monthly basis.
3. Implement the Standard Operating Procedure (SOP) prescribed by SEBI for processing
of investor’s claims and time line for declaration of defaulter.
4. Disseminate the policy for processing of the investor’s claims on its website along with
FAQs for easy understanding of the investors.
5. Any amendment to the Exchange policy for processing of investor’s claims to be
implemented with adequate advance notice to the investors in advance.
SEBI has also advised BSE to take steps to make investors aware of the revised framework, accordingly copy of SEBI letter along with SOP is given in Annexure.
BSE (formerly Bombay Stock Exchange) established in 1875, is Asia’s first & now the world’s fastest Stock Exchange with a speed of 6 microseconds. BSE is India’s leading exchange group and has played a prominent role in developing the Indian capital market. BSE is a corporatized and demutualized entity, with a broad shareholder base that includes the leading global exchange- Deutsche Bourse, as a strategic partner. BSE provides an efficient and transparent market for trading in equity, debt instruments, equity derivatives, currency derivatives, commodity derivatives, interest rate derivatives, mutual funds and stock lending and borrowing.
BSE also has a dedicated platform for trading in equities of small and medium enterprises (SMEs) that has been highly successful. BSE also has a dedicated MF distribution platform BSE StAR MF which is India Largest Mutual Funds Distribution Infrastructure. On October 1, 2018, BSE launched commodity derivatives trading in Gold, Silver, Copper, Oman Crude Oil Guar Gum, Guar Seeds, Almond & Turmeric.
BSE provides a host of other services to capital market participants including risk management, clearing, settlement, market data services and education. It has a global reach with customers around the world and a nation-wide presence. BSE’s systems and processes are designed to safeguard market integrity, drive the growth of the Indian capital market and stimulate innovation and competition across all market segments.
Indian Clearing Corporation Limited, a wholly owned subsidiary of BSE, acts as the central counterparty to all trades executed on the BSE trading platform and provides full novation, guaranteeing the settlement of all bonafide trades executed. ICCL is the only clearing corporation in India to have been granted "AAA" rating by two rating agencies, India Ratings Ltd. (Indian arm of Fitch Ratings) and Care Ratings Ltd. BSE Institute Ltd, another fully owned subsidiary of BSE runs one of the most respected capital market educational institutes in the country. Central Depository Services Ltd. (CDSL), associate company of BSE, is one of the two Depositories in India.
BSE has set up an Investor Protection Fund (IPF) on July 10, 1986 to meet the claims of investors against defaulter Members, in accordance with the framework issued by the Ministry of Finance, Government of India and SEBI. BSE Investor Protection Fund is responsible for creating Capital markets related awareness among the investor community in India.
India International Exchange (IFSC) Limited (India INX) is India’s first international exchange in International Financial Services Centre (IFSC) located at the Gujarat International Finance-Tec City (GIFT City). India INX is a subsidiary of BSE Limited. The Exchange was inaugurated by Hon’ble Prime Minister of India, Shri Narendra Modi, on Jan 09, 2017 and commenced its operations from Jan 16, 2017.
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