MANU/SSMD/0028/2013

Ministry : Securities and Exchange Board of India

Department/Board : Market Regulation Department

Circular No. : CIR/MRD/ICC/8/2013

Date : 18.03.2013

Notification/ Circulars Referred : CIR/MRD/DSA/24/2010 dated August 11, 2010 MANU/SSMD/0061/2010

All Stock Exchanges having nation-wide trading terminals

Dear Madam/Sir,

Arbitration Mechanism through Stock Exchanges - Introduction of Automatic Process and Common Pool of arbitrators.

SEBI has received inputs from investors regarding functioning of the arbitration mechanism at the Stock Exchanges. In light of which, you are advised to carry out the following changes in the arbitration mechanism.

1. List of Arbitrators on the panel of all stock exchanges having nation-wide trading terminals shall be pooled and will be called a 'Common Pool'. This list shall be made publicly available including by way of display on websites of the stock exchanges.

2. 'Common pool' of Arbitrators will consist of Arbitrators listed on the panels of all stock exchanges having nation-wide trading terminals. The pooling of arbitrators will be done centre-wise. To illustrate, the list of arbitrators on the panel of all stock exchanges for the region covered by the Delhi centre will be pooled. This would enable an applicant from the region to choose any arbitrator from the 'Common Pool' for Delhi.

If the client and member (stock broker, trading member or clearing member) fail to choose the Arbitrator(s) from the Common Pool, the Arbitrator(s) will be chosen by an 'Automatic Process' wherein neither the parties to arbitration (i.e. client or member) nor the concerned Stock Exchanges will be directly involved.

3. The 'Automatic Process' will entail a randomized, computer generated selection of Arbitrator, from the list of Arbitrators in the 'Common Pool'. The selection process shall be in chronological order of the receipt of arbitration reference i.e. only after selecting an arbitrator for the former arbitration reference received, selection for the latter shall be taken up.

4. The 'Automatic Process' will send a system generated, real time alert (sms, email etc.) to all entit........