The arbitrator will now be selected from a centre-wise common pool through an automated process and all parties will be sent a system-generated text message or email
Market regulator Securities and Exchange Board of India (SEBI), starting 1st April, has automated the process of selecting an arbitrator from a centre-wise common pool.
SEBI had asked all stock exchanges with nation-wide trading terminals to create a common pool of arbitrators according to the centre instead of having exchange-wise pools.
”The selection of arbitrators by stock exchanges as done currently is now replaced by an 'automatic process'. In order to bring more transparency and fairness, the 'automatic process' entails a randomized, computer-generated selection of arbitrator, from the list of arbitrators in the 'common pool'. The 'automatic process' sends a system generated SMS or email to all entities involved in the particular case," SEBI said in a release.
Currently, arbitration facilities at stock exchanges with nation-wide trading terminals are available at eight centres, in Ahmedabad, Chennai, Delhi, Hyderabad, Indore, Kanpur, Kolkata and Mumbai.
Arbitration process generally refers to resolving disputes through an out-of-court settlement. Last year, SEBI exempted investors seeking arbitration reference for claims of up to Rs10 lakh from deposits with the stock exchanges and said expenses on such applications would be borne by the bourses.
Already, investors complain that stock exchanges routinely hustle investors into filing arbitration, instead of resolving through mediation and conciliation. Investors are always at a disadvantage in arbitration proceedings, because they struggle to understand the rules, while the broker is easily able to handle arbitration, is usually present with qualified staff and lawyers, and maintains a friendly equation with stock exchange officials and often the arbitrators themselves.
Moneylife has repeatedly pointed out that it is such unthinking policies that are largely responsible for India's investor population shrinking from around 20 million when India started its economic liberalisation programme to a mere 8 million today (Swarup Committee report).
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