Sebi Directs Stock Brokers To Improve Accessibility Of ‘Investor Charter'

The Securities and Exchange Board of India (Sebi) has strengthened investor protection by mandating stock brokers to improve access to the investor charter. This initiative aims to enhance transparency and financial awareness. Key updates include the introduction of the Online Dispute Resolution (ODR) platform and the launch of SCORES 2.0, Sebi’s revamped grievance redressal system.

Sebi has instructed stock exchanges to ensure stock brokers inform their clients (both existing and new) about the Investor Charter. Stock brokers must display the investor charter prominently on their websites, and in office locations, and include it in account opening kits—delivered via email or physical copies.

Stock brokers must update their websites monthly with details of investor complaints and their resolutions, ensuring transparency. The data must be published by the 7th of the following month.

"The provisions of this circular shall come into force with immediate effect," Sebi said in a circular dated February 21.

In December 2021, Sebi introduced an investor charter for brokers, outlining the services offered to investors, their rights, brokers' activities with timelines, as well as dos and don’ts for investors and grievance redressal procedures. The initiative aimed to increase investor awareness about key processes like account opening, KYC, in-person verification, complaint resolution, and the issuance of contract notes and statements.

What Does Investor Charter Include

The investor charter for stock brokers outlines the services brokers provide, such as trade execution, issuing contract notes, and handling margin payments, while also focusing on protecting investors' interests. It highlights brokers' commitment to ethical practices, confidentiality, and transparency.

The charter details investors' rights, like receiving clear information, accurate account statements, and access to grievance redressal mechanisms. It also includes dos and don'ts for investors and specifies timelines for broker activities. For disputes, the charter offers several resolution options, including Sebi's SCORES platform and the ODR system.