In a move to strengthen consumer protection in the financial segment, the Securities and Exchange Board of India (SEBI) revamped the investor charter for brokers. The amendments also give fillip to the effort to enhance financial inclusion and investor financial literacy.
Given the new face of the market in the securities market, the regulator has established updates in light of the latest developments, such as the introduction of the Online Dispute Resolution (ODR) platform and the rollout of SCORES 2.0, the web-based, centralized grievance redressal mechanism of SEBI.
The revised charter gives some significant details, including its vision and mission, a precise specification of the services brokers provide to the investor, the timeframe for various brokerage activities, and the revised Do's and Don'ts to the investor. It also gives a precise grievance redressal mechanism, investor claim handling in case of default by the trading member, and a standard template to place investor complaints data on the website. The charter also obliges brokers to place an yearly summary of the resolution of complaints.
To ensure proper investor education, SEBI has directed brokers to put up the charter in a conspicuous manner at the website, provide it in easily accessible location at the office, and also in the account-opening kits. The brokers are also expected to provide a duplicate to the client by means of an email or letter.
Furthermore, all brokers are also mandated to continue posting complaint-related details, including complaints received and complaints settled, to respective websites. This shall be updated by the 7th day of each month.
SEBI first introduced an investor charter for stock brokers in December 2021, outlining investor rights, services offered by brokers, and the expected timelines for various processes. It also covered essential investor awareness topics such as account opening, KYC procedures, in-person verification, complaint resolution, issuance of contract notes, and financial statements.
By refining the charter, SEBI aims to provide the investor with greater transparency and clearer perception about his responsibilities and rights, and in the long term, to establish a more secure and well-aware investor environment.
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Source: economictimes.indiatimes.com
