The Securities and Exchange Board of India (SEBI) has a consultation paper proposing an improved online dispute resolution (ODR) framework for the securities market in India, aiming to save time, and boost enforceability and the ease of doing business.
The improvements emerged after SEBI received several representations from stakeholders, pointing out the gaps and issues entities were facing in ODR.
The SEBI received reports on issues in record keeping, handling complaints, enforceability and the appointment of arbitrators, etc., in the existing ODR framework. Stakeholders also said the pre-ODR framework had none of these issues and the procedural requirements operated smoothly.
It is proposed that some of the best practices in the pre-ODR framework be included in the ODR framework and continue in online-only mode.
Under the proposals, it had been suggested that instead of ODR institutions, market infrastructure institutions (MIIs) should be responsible for handling dispute resolution, where the parties would provide the names of their preferred arbitrators. Unresolved investor grievances under the SEBI complaints redressal system will escalate to conciliation stage under the ODR framework, reducing the redressal timeline by 21 days.
The SEBI has also proposed that for alternate investment funds (AIF), they shall have the option to resolve their disputes under their agreement.
For AIF trusts, an investor’s money is protected from the fund manager’s liability of paying any damages in dispute resolution. The new framework proposals suggest extending this protection to all AIFs to include trusts, companies or limited liability partnerships.
Feedback can be shared with the SEBI online through the by 13 August 2026.
