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

The Securities and Exchange Board of India (SEBI) has demonstrated significant efficiency in its grievance redressal mechanism, resolving a substantial volume of investor issues through its SCORES platform. New data reveals a proactive approach by the regulator to manage rising investor concerns in the capital markets.

Efficiency Gains and Declining Pendency

In a significant boost to investor confidence, SEBI reported that it disposed of 5,548 complaints during the month of May. This resolution rate outpaced the volume of new grievances received, which stood at 4,918 fresh complaints during the same period.

This high resolution rate has led to a noticeable reduction in the overall backlog. The total number of pending complaints dropped from 6,167 to 5,537 as of May 31, 2024. While the regulator is clearing the queue, a small fraction of cases remains outstanding; specifically, 10 complaints have been pending for more than three months, involving entities such as KFin Technologies Pvt Ltd, Secur Credentials Ltd, and Eastern Investments Ltd.

Operational Speed and Resolution Timelines

The regulator's data highlights the speed at which market entities are responding to investor grievances. In April, regulated entities took an average of just five days to submit their Action Taken Reports (ATRs) to investors. Furthermore, for complaints that required a first-level review, the average resolution time was recorded at eight days.

It is important to note that the "pending" status does not always indicate inaction by a company. SEBI clarified that the pending figure includes cases where entities have already submitted their ATRs within the stipulated timeframe, but the complaints remain open because the investor has opted to seek a review due to dissatisfaction with the initial response.

Understanding the SCORES 2.0 Framework

Under the enhanced SCORES 2.0 mechanism, SEBI has streamlined the workflow to ensure accountability. Once a complaint is lodged, it is automatically forwarded to the concerned entity, which is mandated to submit an ATR within 21 days.

The platform provides a multi-tier recourse system for investors:

• First-Level Review: If an investor is unsatisfied with the entity's response, they can seek a review within 15 days. This is then examined by a designated body.
• Second-Level Review: If dissatisfaction persists, investors can trigger a second-level review within another 15 days, at which point SEBI directly examines the matter and submits its own ATR.
• ODR Mechanism: Complaints are also marked as disposed of if the investor chooses to transition the matter to the Online Disputes Redressal (ODR) mechanism.

Key Takeaways

• Increased Resolution Efficiency: SEBI resolved 5,548 complaints in May, exceeding the 4,918 new complaints received, leading to a decrease in total pendency.
• Rapid Response Times: Entities are responding quickly, with an average of five days taken to submit Action Taken Reports (ATRs).
• Robust Review Process: The SCORES 2.0 system offers a structured two-tier review process, allowing investors to escalate grievances if they are unhappy with an entity's initial resolution.