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SEBI strengthens online dispute resolution mechanism in securities market

The Securities and Exchange Board of India (SEBI) on Wednesday strengthened the dispute resolution mechanism in the securities market to empower the investors. The market regulator amended rules to operationalize Online Dispute Resolution (ODR) mechanism for investors across registered intermediaries / regulated entities.

The announcement on this was made by SEBI Chairperson Madhabi Puri Buch at a press conference in which key decisions related to ESG framework, mutual funds, Alternative Investment Funds and shareholder empowerment were also announced.

“Against the backdrop of increase in investor participation in the securities market in India, and emergence of technology aided dispute resolution frameworks, the Board approved the proposal to harness Online Dispute Resolution (ODR) mechanism,” a SEBI release said.

Among the measures the market watchdog extended the MII [Market Infrastructure Institution] administered conciliation and arbitration mechanism to registered intermediaries / regulated entities and their investors / clients. It also allowed conducting proceedings in a hybrid mode along with streamlining the dispute resolution process and adoption of other measures to strengthen enforcement of awards.

SEBI also expanded the capacity of the MII administered conciliation and arbitration mechanism with the aid of ODR institutions.

Among other key decisions, SEBI amended regulations governing Alternative Investment Funds (AIFs) with a view to standardise provisions for valuation of investments and dematerialisation of units of AIFs. The market regulator also made changes in rules governing certification requirements for key employees of Investment Manager, transactions with associates, and option to sell unliquidated investments to a new scheme of the AIF.

SEBI also approved the regulatory framework for ESG (Environmental, Social and Governance) disclosures, ratings and investing. The SEBI board gave its consent to the amendments to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and SEBI (Mutual Funds) Regulations, 1996 to facilitate a balanced approach to ESG.

On ESG Disclosures, the market regulator has mandated introduction of BRSR (Business Responsibility and Sustainability Report) Core to enhance the reliability of ESG disclosures. The BRSR will contain a limited set of Key Performance Indicators (KPIs), for which listed entities will be required to obtain “reasonable assurance”, a SEBI release said.

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