The SEBI Circular has laid down the procedure for handling certain types of complaints (as set out in Annexure 2 of the SEBI Circular) by the stock exchanges (“SEs”) as well as standard operating procedure for actions to be taken against listed companies in case of failure to redress investor grievances.
The SEBI Circular notes that the Investors are encouraged to initially take up their grievances directly with the listed company and the investors can use the SCORES platform to submit their complaints.
If the complaints are not addressed by the listed company within a period of 30 days from the date of receipt of the complaint, the complaints are to be forwarded to the Designated Stock Exchange (“DSE”) through the SCORES platform.
The DSE is then required to take up the complaint with the listed company and if complaint is pending for more than 60 days by listed companies, stock exchange shall initiate appropriate action against the listed company which can be in the nature of a fine or freezing of the entire shareholding held by the promoter and the promoter group in the listed company as also the freezing of the other securities held by the promoters or the promoter group in their demat account.
The DSE may also initiate any other action as deemed appropriate by the DSE.
Once stock exchange(s) has exhausted all options and if number of pending complaints exceed 20 or the value involved is more than Rs. 10 lakhs, stock exchanges are required to forward the complaints against such listed companies to SEBI for further action, if any.
This SEBI Circular shall be effective from 01 September 2020.
The circular can be accessed here