The regulator said the proposed changes are aimed at addressing delays in arbitration, appointment of arbitrators, enforceability of awards and operational issues under the existing framework
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The Securities and Exchange Board of India (SEBI) on Thursday proposed a major overhaul of the online dispute resolution (ODR) framework for the securities market, shifting key responsibilities from ODR institutions to market infrastructure institutions (MIIs) such as stock exchanges, depositories and clearing corporations, while seeking to shorten grievance resolution timelines.The regulator said the proposed changes are aimed at addressing delays in arbitration, appointment of arbitrators, enforceability of awards and operational issues under the existing framework."The issues raised include the process of appointment of arbitrators, delay in receipt of payment from market intermediaries and listed entities to ODR institutions and from ODR institutions to Arbitrators, enforcement of the arbitration awards... delay in proceedings, etc," SEBI said.Under the proposal, MIIs will empanel conciliators and arbitrators, administer conciliation and arbitration proceedings and manage the technology-driven ODR process instead of external ODR institutions. SEBI said MIIs are better placed to enforce compliance as intermediaries and listed entities are already registered with them in various capacities.Public comments on the proposals have been invited by August 13.Investor choiceThe regulator has also proposed restoring investor participation in the appointment of arbitrators. Both parties will be allowed to indicate their preferred names from an approved panel before the MII appoints the arbitrator.To speed up grievance redressal, unresolved complaints on the SCORES platform would move directly from designated bodies to the conciliation stage under the ODR mechanism, reducing the overall process by 21 calendar days.SEBI has also proposed allowing Alternative Investment Fund (AIF) investors to choose dispute resolution mechanisms agreed upon in their contracts instead of mandating the ODR platform. Separately, investor protection currently available only to trust-based AIFs against liabilities arising from dispute resolution would be extended to AIFs structured as companies or LLPs.Where an arbitration award is challenged by a regulated entity, MIIs may release up to 50 per cent of the award amount or ₹5 lakh, whichever is lower, to the investor from the interest-free deposit maintained by the regulated entity, subject to an undertaking.Published on July 23, 2026
