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Investor Services

Investor Services

Investor Services (Part 1)

  • Introduction to SCORES: SEBI Complaints Redress System (SCORES) is a web-based centralized system to capture investor complaints against listed companies and registered intermediaries.
  • Key Features of SCORES:
    • Available 24x7
    • Introduced on June 8, 2011
    • Facilitates redressal of investor grievances in a speedy manner
    • SCORES 2.0 launched on April 01, 2024, with features like auto-routing, auto-escalation, and monitoring by Designated Bodies
  • Process of Filing Complaints on SCORES:
    • Investors can lodge complaints through the web URL or an App
    • Website URL for SCORES 2.0: https://scores.sebi.gov.in
    • Investors can seek assistance from Investor Associations recognized by SEBI or SEBI's toll-free helpline number
  • Salient Features of SCORES 2.0:
    • Timelines for redressal of investor complaints: 21 calendar days from the date of receipt of complaint
    • Two levels of review: first review by the Designated Body and second review by SEBI
    • Auto-escalation of complaints to the next level in case of non-adherence to prescribed timelines
    • Integration with KYC Registration Agency database for easy registration of investors on SCORES
  • Transfer of Shares to Demat Account of IEPF Authority:
    • Companies are required to transfer shares to the Investor Education and Protection Fund (IEPF) Authority if dividend has not been paid or claimed for 7 consecutive years or more
    • Shares can be transferred in dematerialized or physical form to the demat account of IEPF Authority
  • Online Resolution of Disputes in the Indian Securities Market (ODR):
    • SEBI has put in place a common Online Dispute Resolution Portal (ODR Portal)
    • ODR platform allows investors to register disputes against listed companies, specified intermediaries, and regulated entities
    • The ODR platform includes pre-conciliation, conciliation, and arbitration stages for resolving disputes

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Investor Services (Part 2)

  • Complaints Redressal: Complaints falling under the purview of SEBI can be filed under the SCORES.
  • Statement of Shares: The company is required to furnish a statement of shares not transferred to the Investor Education and Protection Fund, which is True.
  • Aadhar e-KYC Process: The process involves the investor visiting the portal of KUA or the SEBI registered intermediary, entering the Aadhaar Number or Virtual Id, and providing consent on the KUA portal.
  • e-KYC Details: The KUA will receive the e-KYC details from UIDAI upon successful Aadhaar authentication, which will be further forwarded to Sub-KUA in encrypted format.
  • Online KYC Process: The online KYC process can be completed through eSign service, which is an online electronic signature service that can facilitate an Aadhaar holder to forward the document after digitally signing the same.
  • Verification Mechanism: The KYC process involves verification of mobile number, email ID, Aadhaar, PAN, and bank account details through OTP, UIDAI authentication, and Penny Drop mechanism.
  • Officially Valid Documents (OVD): OVD includes passport, driving license, Aadhaar, Voter's Identity Card, and job card issued by NREGA.
  • KYC Completion: The KYC process can be completed by submitting the required documents online, and the RI shall forward the KYC completion intimation letter to the investor.

Investor Services (Part 3)

  • Account Restrictions: If the address or addressee of an account is not available, no transactions shall be allowed in such an account. Intimation shall also be sent to the Stock Exchange and Depository.
  • Original Seen and Verified (OVD) Requirement: The OVD requirement can be met by providing a clear photograph or scanned copy of the original OVD through the eSign mechanism or as a digitally signed document issued to the DigiLocker by the issuing authority.
  • In-Person Verification (IPV) Requirements: IPV is not required when KYC is completed using Aadhaar authentication or verification of UIDAI. IPV is also not required when the KYC form is submitted online, and documents are provided through DigiLocker or other online sources.
  • Online KYC App Features: The app should facilitate taking photographs, scanning, acceptance of OVD through DigiLocker, video capturing in a live environment, and usage by authorized persons only. The app should also have features like random action initiation, time stamping, and geo-location tagging.
  • Video In-Person Verification (VIPV) Process: VIPV should be done in a live environment, with a clear and recognizable video of the investor. The process should include random questions and responses, and the photograph of the customer should match with the one downloaded through Aadhaar authentication.

Operational Mechanism for Margin Pledge

  • Initiation of Margin Pledge: A client can initiate a margin pledge in favor of the Trading Member (TM) or Clearing Member (CM) through physical or electronic instruction.
  • Pledge Request Form: The form should have a clause regarding express consent by the client for re-pledge of securities by the TM to CM and further by the CM to CC.
  • Release of Margin Pledge: The TM or CM can release the margin pledge after internal exposure and risk management checks.
  • Invocation of Margin Pledge: In case of default by a client, the TM or CM can invoke the pledge, and the securities will be blocked for early pay-in in the client's demat account.

Framework for Utilization of Client's Pledged Securities

  • Margin Requirement Computation: The margin requirement is computed in real-time at the client level by the Clearing Corporation (CC).
  • Utilization of Pledged Securities: The pledged securities can be utilized for exposure and margin, subject to certain conditions and guidelines.

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Investor Services (Part 4)

  • Collateral Management: The Clearing Corporation (CC) maintains and monitors the collateral at the level of Clearing Members (CMs). The CM is required to provide the collateral in various acceptable forms such as Cash, Bank Guarantee, Govt. Securities, pledge of acceptable shares, etc.
  • Risk Management: The day-to-day real-time risk management with respect to client/Trading Member (TM) exposure, and the margin requirement shall continue to be the responsibility of the CM, and CC shall not monitor the client-level exposure against the available client-level collateral in real-time.
  • Margin Requirement: To provide exposure to CM and/or to the clients/TM of a CM, CC shall aggregate margin requirement at CM level that shall be compared against the available collateral in real-time as an aggregate of:
    • Cash and cash equivalent deposited by CM
    • Own securities pledged by CM with CC
    • CC requires a minimum of 50% of the collateral to be deposited in cash and cash equivalent
    • The TM's proprietary margin requirement will be treated as a client of CM and aggregated along with other clients
  • Re-pledging of Securities: CM shall be allowed to re-pledge acceptable/approved client securities with the CC by furnishing the Unique Client Code (UCC) wise client details. CC shall not allow any exposure to the CM on re-pledged securities of the client/TM.
  • Default Procedures: In the event of default by a client of TM, the TM shall make good the default to CM. In the event of default by a client or TM on its proprietary position, the CM shall make good the default to CC. The process for invocation of pledged and re-pledged securities of client/TM/CM in case of default includes:
    • Encashing available collateral, including cash, cash equivalent collateral, and CM's own pledged securities
    • Invoking re-pledged securities of clients/TM with open positions to close out their positions
    • Not invoking re-pledged securities of clients/TM without open positions to meet settlement obligations of the defaulting CM
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