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Informist, Monday, Dec. 22, 2025

 

By Shakshi Jain

 

NEW DELHI – Designating one or more officers as ombudsperson for redressal of investors' grievances, as proposed under the Securities Markets Code, 2025 may pose implementation challenges for the regulator, a senior official of the Securities and Exchange Board of India said Friday. Besides the requirement of hiring trained professionals, the move will increase the regulator's expenses, the official said.

 

The appointment of ombudsperson(s) may bring in multiplicity in resolution mechanism and "clog SAT (Securities Appellate Tribunal)" if the decision of the ombudsperson is not final, the official said. A case goes to the Securities Appellate Tribunal when a person or an entity is aggrieved by an order or decision by SEBI.

 

"I've seen our investigations are taking more time on average," the official said. Currently, only one bench of the Securities Appellate Tribunal is functional, the official added later.

 

Finance Minister Nirmala Sitharaman Thursday introduced the Securities Markets Code, 2025 in the Lok Sabha, which seeks to overhaul securities regulations in India and consolidate provisions of three laws - the Securities and Exchange Board of India Act of 1992, the Depositories Act of 1996, and the Securities Contracts (Regulation) Act, 1956. The bill, now referred to the Parliamentary Standing Committee on Finance, envisages putting in place a statutory framework to strengthen SEBI and facilitate more efficient securities markets.

 

The bill states that the board of the regulator may provide for an investor grievance redressal mechanism and further designate one or more of its officers as ombudsperson to receive and redress grievances of investors. As per the bill, any investor aggrieved by services of a securities markets service provider, or any act or omission of an issuer, shall seek relief through the investor grievance redressal mechanisms within a period of 180 days from the date of first filing of such a grievance. If the grievance of the investor is not resolved within this period, he/she may file a complaint in writing with the ombudsperson within 30 days.

 

The market regulator's current grievance redressal mechanism involves the SEBI Complaints Redress System (SCORES), which is an online platform that facilitates investors in lodging and tracking their complaints against listed companies, registered intermediaries, and other market participants. These entities against which complaints are filed are required to resolve the issue within 21 days of receipt of the compliant and upload the action taken report on SCORES within 21 days. The mechanism also provides for review of the resolution provided by the entities.

 

Investors who are dissatisfied with the response from a market intermediary or listed company, can escalate the issue to the Smart Online Dispute Resolution (ODR) platform for further resolution through conciliation and arbitration. Under this mechanism, cases are referred to the exchanges which assign arbitrators through an automated system.  

 

It must be noted that the market regulator had in 2023 repealed the Securities and Exchange Board of India (Ombudsman) Regulations, 2003, arguing it does not have the power to adjudge disputes between entities. SEBI also stated that it has taken substantial measures to enhance investor grievance redressal by putting in place suitable mechanisms and taking policy decisions to both strengthen the existing mechanisms of investor grievances as well as addressing the root cause of such grievances. In the past, the market regulator had cited difficulty in implementation of the awards passed by the ombudsman.

 

The Securities Markets Code, 2025 states that the ombudsperson will have certain powers of a civil court.  End

 

Edited by Avishek Dutta

 

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