SEBI Resolves Over 5,500 Investor Complaints via SCORES in May

The Securities and Exchange Board of India (SEBI) continues to strengthen investor protection through its digital grievance redressal mechanism, SCORES. Recent data reveals a significant surge in resolution efficiency, marking a positive trend for retail investors navigating the capital markets.

High Resolution Rate and Declining Pendency

In a significant move towards clearing backlogs, SEBI disposed of 5,548 investor complaints through the SCORES platform during the month of May. While the regulator received 4,918 fresh complaints during the same period, the high volume of resolutions successfully brought down the total number of pending grievances.

As of May 31, the total number of pending complaints saw a notable decline, dropping from 6,167 to 5,537. This reduction highlights the effectiveness of the regulator's recent interventions and its commitment to ensuring that investor grievances do not linger indefinitely.

Operational Efficiency and Entity Responsiveness

The data provided by SEBI highlights impressive turnaround times for market entities. During the month of April, companies took an average of just five days to submit their Action Taken Reports (ATRs) regarding investor complaints. Furthermore, for complaints requiring a first-level review, the average resolution time was recorded at eight days.

Despite this efficiency, a small subset of grievances remains unresolved for extended periods. As of the end of May, 10 complaints have been pending for more than three months. These specific cases involve entities such as KFin Technologies Pvt Ltd, Secur Credentials Ltd, and Eastern Investments Ltd. It is important to note that some "pending" complaints are actually cases where the entity has provided a response, but the investor has opted to seek a review because they are dissatisfied with the resolution.

Understanding the SCORES 2.0 Framework

Under the enhanced SCORES 2.0 framework, SEBI has streamlined the dispute resolution process to ensure accountability. Once a complaint is filed, it is automatically forwarded to the concerned entity, which is mandated to submit an ATR to the investor within 21 days.

The system provides a robust multi-tier review mechanism to protect investor interests:

  • First-Level Review: If an investor is unsatisfied with the entity's response, they can request a review within 15 days. A designated body then examines the matter.
  • Second-Level Review: If the investor remains dissatisfied after the first review, they have another 15 days to seek a second-level review, where SEBI directly examines the matter and submits its own ATR.
  • ODR Integration: Complaints are also marked as disposed of if investors choose to transition their grievances to the Online Disputes Redressal (ODR) mechanism.

Key Takeaways

  • Improved Backlog Management: SEBI resolved 5,548 complaints in May, successfully reducing the total pendency from 6,167 to 5,537.
  • Rapid Response Times: Entities averaged five days to submit Action Taken Reports (ATRs), while first-level reviews were resolved in eight days on average.
  • Tiered Grievance Redressal: The SCORES 2.0 system allows investors two levels of reviews if they are unsatisfied with an entity's initial response.