Sebi to outsource processing of investor complaints

Sebi to outsource processing of investor complaints

Faced with the Herculean task of handling lakhs of investor complaints, market regulator Sebi plans to rope in third party agencies for processing and maintenance of these grievances.

The decision to outsource processing and maintenance of investor grievances has been taken by Sebi to help it resolve these complaints on a fast-track basis, a senior official said.

Incidentally, Sebi is currently in the process of finalizing a set of regulations for outsourcing of work by various market intermediaries such as brokers, mutual funds and investment bankers.

The regulator is said to be against outsourcing of the market entities' core and investor-sensitive activities.

Sebi has decided to put in place stringent conditions for selection of the agency to be empanelled by it for handling the investor complaints and due care would be taken to safeguard the investors' interest, the official added.

The activities to be outsourced by Sebi include receiving complaints from investors, forwarding them to the concerned market entities and companies, tracking their status and conduct necessary follow-ups and preparation of periodic as well as ad-hoc reports on the investor grievances.

Besides, the agencies would also be responsible for entry of the complaints into Sebi's computerized grievance redressal system with proper categorization and codification, updating of the system with Action Taken Reports (ATRs) and keeping investors informed about progress on their complaints.

Sebi is putting in place this web-based centralized system, named Sebi Complaints Redress System (SCORES), for speedy redressal of grievances.

Sebi's existing investor grievance redressal mechanism lacks a centralized database and the resolution of the complaints often gets delayed due to physical movement of files from one desk to the another across its various offices.

Besides reducing time gap between receipt and redressal of a complaint, the new system would also help in storage of the investor grievances, whose numbers have swelled to over 2.7 million since Sebi's inception.

Sebi received more than 32,300 investor complaints in 2009-10, while the numbers are even higher at over 39,600 in the first nine months of the current fiscal.

The new system would have a centralized tracking system for all grievances at various offices and divisions of Sebi. Currently, the list of investor grievances is maintained at various divisions and regional offices of Sebi.