Tech glitches: SEBI norms on compensation soon
February 10, 2021
Regulator working on framework for bourses, brokers to pay investors for losses suffered
A substantial rise in technical glitches, both at the end of stock exchanges and stock brokers, has forced SEBI to look at framing new rules.
“SEBI is actively considering a proposal to introduce a framework for ascertaining the incidents of technical glitches where compensation needs to be paid to the investors and to devise a methodology and calculation of compensation,” SEBI has said in its annual report.
Series of glitches NSE has seen a series of tech glitches over the past five years. NSE’s former chairman Ashok Chawla had written a strong letter to the management and staff as to how the recurring tech glitches could become a ‘Black Swan’ event for the bourse.
Updated Feb 10, 2021 | 18:07 IST
Further, a well-documented framework at the depository level for orderly winding down of the depositories operations is being developed in accordance with guidelines specified by Sebi Sebi plans to introduce framework to compensate investors for technical glitches | Photo Credit: BCCL
New Delhi: Markets regulator Sebi is considering a proposal to introduce a framework to ascertain the incidents of technical glitches whereby compensation would be given to investors.
Besides, the regulator is also looking to devise a methodology and calculation of compensation.
Further, to improve the efficacy of liquidity enhancement measures such as market making, Liquidity Enhancement Scheme (LES) and call auction mechanism for illiquid securities, Sebi would review the existing framework.
Read more about Sebi plans framework to compensate investors for technical glitches on Business Standard. Sebi is considering a proposal to introduce a framework to ascertain the incidents of technical glitches whereby compensation would be given to investors
15 Comments on this Story
SreenivasaChakravarti29 days ago
Have written #Karvy to refund ledger balance but there is no action taken. Complaints escalated to NSDL again no reply. NICE Portal skirts the subject of ledger balances and only asks for scripts. It’s a perfect circular logic where small investors are destined to lose.
SSRINIVASAN48 days ago
Karvy Stock Broking Limited has cheated small investors by pledging the shares by misusing the Power of Attorney (POA). These POAs were obtained as a matter of routine from the small investors and there was no way a small investor could say no to signing the POA. NSE& BSE have not banned this group from doing any business in securities market. We invest in the security market hoping that the regulatory bodies would take stringent action on erring brokers both on the brokeing firms and on the persons involved in the fraud by confiscating their personal wealth. But regulatory bodies did not safeguard the interest of small investors
Action Financial Services Declared Defaulter, Expelled by NSE
Moneylife Digital Team
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Mumbai-based Action Financial Services (India) Ltd (AFSL), a listed company, which in October last year closed its business, has been declared as defaulter member and expelled by the National Stock Exchange (NSE).
Similarly, NSE Clearing Ltd has also declared AFSL as defaulter. The exchange has also advised investors to file their claims within three months.
In a public notice, NSE says, .Action Financial Services has been declared defaulter under Byelaws 1(a) of Chapter XII of the Byelaws of the Exchange and expelled under Rules 1 and 2 of Chapter IV of the Rules of the Exchange.