CS Neha Sharma Taxmann’s Advisory & Research Team (Corporate Laws)
CS Neha Sharma Taxmann’s Advisory & Research Team (Corporate Laws)
1. Introduction
The Securities and Exchange Board of India (SEBI) has proposed a significant revamp of its Online Dispute Resolution (ODR) Framework to make investor grievance redressal faster, simpler and more effective.
The proposed reforms seek to address several operational issues experienced under the existing framework, including delays in dispute resolution, challenges in appointing conciliators and arbitrators, enforcement of arbitral awards, record maintenance and overall administrative efficiency.
To overcome these challenges, SEBI has released a Consultation Paper on Streamlining the Online Dispute Resolution Framework in the Indian Securities Market. The proposal retains the fully digital nature of the ODR mechanism while introducing structural reforms that aim to enhance transparency, strengthen enforcement and improve investor confidence. SEBI has invited comments from investors, intermediaries and other stakeholders on the proposed framework. Last date for submission of comments is 13 August 2026.
2. Background
SEBI introduced the Online Dispute Resolution (ODR) Framework through its Circular dated 31 July 2023, which was later consolidated under the Master Circular dated 28 December 2023.
Under the existing framework investors first file complaints on the SEBI Complaints Redress System (SCORES). If the grievance remains unresolved, it can be escalated to the ODR Portal for online conciliation and arbitration.
Since its implementation, SEBI has received feedback from Market Infrastructure Institutions (MIIs), investors and other stakeholders, pointing out several practical challenges in operating the framework. These concerns prompted SEBI to undertake a comprehensive review of the ODR mechanism.
3. Key Highlights of SEBI’s proposed ODR framework
The draft circular introduces a structured mechanism beginning with complaint resolution through SCORES, followed by pre-conciliation review, online conciliation, and online arbitration, along with revised timelines, fee structure, and enhanced enforcement measures.
Upon implementation the proposed Circular will supersede the ODR Master Circular, 2023, actions already taken under the earlier framework will remain valid and matters appealable before the Securities Appellate Tribunal (SAT) and other statutory forums will remain outside the scope of the ODR Portal.
3.1 Investor Grievance Redressal Process: From SCORES to the Designated body and ultimately to the ODR Mechanism
Under the proposed framework, investor grievances are resolved through a sequential process involving the SCORES portal, the Designated Body, and, where necessary, the Online Dispute Resolution (ODR) mechanism. The key steps are as follows:
3.1-1 Filing of complaint by investor through the SCORES Portal
The investor must first lodge the complaint against a registered intermediary, listed company, or any other regulated entity through SEBI’s SCORES Portal.
Once a complaint is received, the concerned entity must resolve the complaint and submit an Action Taken Report (ATR) within 21 calendar days.
3.1-2
Review and Monitoring by the Designated Body (Pre-Conciliation Stage)
The complaint will be forwarded to the relevant Designated Body (DB) for monitoring. The Designated Body will oversee timely submission of ATRs and guide entities in improving grievance resolution.
In case the investor is satisfied with the ATR or does not seek review within 15 calendar days, the complaint will be closed.
However, if the investor is dissatisfied with the ATR or the regulated entity fails to submit the ATR within 21 days, the complaint will automatically move to the Designated Body for review.
The Designated Body functions as a pre-conciliation mechanism and is required to review the complaint engage with the concerned entity wherever necessary and communicate a revised ATR within 10 calendar days.
3.1-3 Escalation of Unresolved Complaints to the Online Dispute Resolution (ODR) Mechanism
In case the grievance still remains unresolved, or the Designated Body fails to respond within the prescribed timeline, the complaint becomes eligible for escalation to the ODR mechanism.
3.2 Online Dispute Resolution (ODR) Framework for Conciliation and Arbitration
Investor grievances that remain unresolved after SCORES shall first proceed to online conciliation through the ODR Portal. Cases shall be allocated as given hereunder:
Nature of Dispute
Allocated To Listed companies & Trading Members
Stock Exchanges Depository Participants & Vault Managers Depositories
Other Market Intermediaries
MIIs on Round-Robin Basis
3.2-1 Online conciliation proceedings under the proposed ODR framework
The concerned MII will appoint a conciliator from its approved panel after receipt of the conciliation fee and submission of all necessary documents. Once the conciliator is appointed, the conciliation fee will not be refunded, even if the matter is subsequently withdrawn.
The conciliator will conduct online meetings to facilitate an amicable settlement. Where both parties mutually agree to the settlement terms, the conciliation will be treated as successful. However, if conciliation fails, the conciliator will determine the Admissible Claim Value (ACV), record observations on the dispute, and the dispute may thereafter proceed to arbitration. The settlement becomes legally binding once both parties provide digital signatures or electronic confirmation on the agreed settlement terms.
3.2-2 Online Arbitration proceedings under the proposed ODR framework
Both parties may indicate three preferred arbitrators from the approved panel. If a common preference exists, the concerned MII will appoint that arbitrator.
Where no common preference is available, the MII will appoint a sole arbitrator through the Centralised Arbitrator Appointment Process (CAAP) after excluding the names preferred by the parties.
3.2-3 Constitution of the Arbitral Tribunal based on the aggregate claim value
Constitution of the Arbitral Tribunal Based on the Aggregate Claim Value:
Up to Rs.30 lakh
Above Rs.30 lakh
Sole Arbitrator
Three-Member Arbitral Tribunal
The arbitral award must ordinarily be delivered within 3 months from appointment; and may be extended by 2 additional months with recorded reasons. Where a party fails to participate despite a 10-day notice, the arbitrator may pass an ex parte award. The venue of online proceedings shall ordinarily be the investor’s place of residence/business or where the investor resides outside India, the registered office of the regulated entity.
Challenges to arbitral awards under Section 34 of the Arbitration and Conciliation Act, 1996 shall lie before the competent court having such jurisdiction. In case an arbitral award is challenged by the Investor, the Investor must deposit 100% of the award amount with the concerned MII. The MII may release 50% of the award amount, or Rs. 5 lakh, whichever is lower.
3.2-4 ODR Fee Structure:
Conciliation Fee Rs. 6,000 is payable only by the regulated entity. Investors are not required to pay any conciliation fee.
3.2-5 Arbitration Fee:
Admissible Claim Value
Up to Rs.1 lakh
Rs.1 lakh – Rs.10 lakh
Rs.10 lakh – Rs.20 lakh
Rs.20 lakh – Rs.30 lakh
Rs.30 lakh – Rs.50 lakh
Rs.50 lakh – Rs.1 crore
Arbitration Fee
Rs.5,400
Rs.9,000
Rs.13,500
Rs.18,000
Rs.67,500
Rs.1,35,000
For claims exceeding Rs.1 crore, an ad valorem fee of 1% of the claim value (subject to the prescribed minimum) will apply. Generally, both parties are required to deposit arbitration fees initially, while the successful party becomes entitled to a refund.
3.2-6 Statutory Timelines Prescribed under the Proposed ODR Framework
Activity
Resolution
Conciliation
Interim Relief Within 7 days of undertaking
3.3 Special categories of complaints under the proposed ODR framework
Certain categories of complaints are treated differently under the proposed framework:
(a) Complaints against Stock Exchanges, Depositories and Clearing Corporations (MIIs) cannot be escalated to ODR.
(b) Complaints relating to AIFs, VCFs, KRAs and CRAs may directly proceed to ODR where the investor is dissatisfied or no ATR is submitted within the prescribed period.
3.4 Cases not eligible for ODR
The ODR mechanism will not be available for:
(a) Disputes pending before courts, tribunals or consumer forums;
(b) Matters under investigation by law enforcement agencies;
(c) Disputes already settled through conciliation;
(d) Matters where arbitration has already commenced or concluded;
(e) Time-barred claims;
(f) Disputes under the IEPFA or other regulatory authorities;
(g) Disputes against the Central or State Governments; and
(h) Disputes governed by any other mutually agreed dispute resolution mechanism.
3.5 Matters directly referred to Arbitration
The following categories of disputes will bypass conciliation and proceed directly to arbitration:
(a) Disputes between two regulated entities;
(b) Recovery proceedings initiated by regulated entities against investors;
(c) Disputes involving claims exceeding Rs.1 crore; and
(d) Claims against defaulting trading members covered under existing mechanisms.
3.6 Standard Operating Procedures (SOPs)
MIIs, in consultation with SEBI, will formulate detailed SOPs governing:
(a) Filing of claims;
(b) Pre-conciliation procedures;
(c) Conduct of conciliation and arbitration;
(d) Appointment and monitoring of conciliators and arbitrators;
(e) Code of conduct and conflict management;
(f) Enforcement actions;
(g) Handling frivolous or repetitive complaints;
(h) Fee collection mechanism; and
(i) Feedback and reporting systems.
4. Conclusion
SEBI’s proposed ODR framework aims to make investor grievance redressal faster, simpler, and more effective by reducing procedural delays and strengthening the online dispute resolution process. The proposed reforms enhance the role of Market Infrastructure Institutions (MIIs), improve the appointment process for conciliators and arbitrators, prescribe clearer timelines, and provide stronger investor protection.
Through this consultation paper, SEBI has invited public comments until 13 August 2026 before finalising the revised framework. Once notified, the new circular will come into force three months from the date of its issuance, replacing the existing ODR Master Circular, 2023.
