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Unit study guide · NISM Series VII

Investor Grievances and Arbitration

15 questions in this unit

What this unit covers

Key ideas

From the practice bank · 1

Within what period after receiving a complaint on SCORES must the regulated entity resolve it and upload its Action Taken Report?

Both the number of days and the calendar-day basis match the requirement. The live SCORES FAQ requires the entity to resolve the complaint and upload its Action Taken Report within 21 calendar days of receipt. This question tests the entity’s response obligation, not the total duration of every possible review or adjudication. Remember: Remember the stage and the type of day, not just the number 21.

Hint Common mistake: Treating a complaint deadline as an exchange trading-day calculation.

VII-034

From the practice bank · 2

After an unresolved complaint to a broker, an investor uses SCORES and requests both available reviews. Which sequence correctly identifies the entity response, first review and second review?

This answer preserves the entity, first-review and second-review order. The entity, here the broker, provides the initial response. The Designated Body handles the first review. SEBI handles the second review. The sequence is limited to the SCORES route described. It does not make completion of SCORES reviews a universal prerequisite for ODR. Remember: Within SCORES, separate the entity response, Designated Body review and SEBI review.

Hint Common mistake: Turning a platform-specific review process into a compulsory ladder for every remedy.

VII-035

From the practice bank · 3

For an NSE member declared a defaulter after 13 August 2024, what is the maximum IPF compensation per eligible investor per defaulter member, subject to the admitted claim?

₹35 lakh matches the stated NSE limit and date scope. NSE’s stated ceiling for the specified category is ₹35 lakh per investor per defaulter or expelled member. The ceiling is not an automatic entitlement to ₹35 lakh. The admitted eligible claim and applicable fund rules still matter. Remember: Never answer an IPF-limit question without checking the named exchange and date.

Hint Common mistake: Assuming all exchanges have one universal limit or that every claim receives the maximum.

VII-036

From the practice bank · 4

A dispute on SMART ODR remains unresolved after pre-conciliation. Which stage normally follows?

Conciliation follows unsuccessful pre-conciliation. The described ODR sequence moves from pre-conciliation to conciliation. If unresolved after conciliation, arbitration may follow. A conciliator helps the parties seek a resolution. The stem does not describe an existing award or an appeal. Remember: Do not omit pre-conciliation when describing the complete ODR sequence.

Hint Common mistake: Calling conciliation the first activity on the portal without acknowledging pre-conciliation.

VII-037

From the practice bank · 5

An investor wants to submit a SCORES complaint without identifying the complainant. How is an anonymous complaint treated?

This answer follows the stated exclusion. Identifying the entity complained against is different from identifying the complainant. Supporting documents or a large claim do not remove the anonymous-complaint exclusion. Remember: An anonymous complaint is not an admissible SCORES submission.

Hint Common mistake: Thinking that strong evidence removes the need for an identified complainant.

VII-068

From the practice bank · 6

An investor asks SCORES to decide a contested damages claim as an arbitral tribunal. Which description correctly states its role?

This answer matches the platform’s stated non-adjudicatory role. SCORES supports grievance redressal. Its FAQ expressly distinguishes that function from adjudication. A contested dispute may need an appropriate dispute-resolution forum. SCORES itself is not the arbitral tribunal. Remember: Do not confuse grievance handling with an adjudicatory award.

Hint Common mistake: Assuming that a regulator’s complaint platform automatically decides every compensation dispute.

VII-069

From the practice bank · 7

The same investor-broker dispute is already pending before a court. How does the SCORES FAQ treat a complaint on that pending matter?

The FAQ excludes matters pending before a court. The question states that the same matter is already before a court. The SCORES FAQ lists such pending matters among complaints it does not deal with. This says nothing about the merits of the court case. Remember: Check whether the same matter is already pending in an excluded forum.

Hint Common mistake: Treating SCORES as a parallel court for every unresolved complaint.

VII-090

From the practice bank · 8

In an investor dispute, a neutral person helps both parties work towards mutually acceptable terms rather than deciding the claim through an award. Which process is described?

The neutral assists an agreed settlement rather than adjudicating through an award. The neutral’s role is to assist agreement between the parties. That describes conciliation. Arbitration instead involves determination through an award, subject to the applicable legal framework. Remember: Conciliation seeks mutual agreement. Arbitration produces a decision through an award.

Hint Common mistake: Assuming every neutral involved in a dispute is acting as an arbitrator.

VII-091

From the practice bank · 9

An investor is dissatisfied with the entity’s Action Taken Report on SCORES. Within what period from receipt of that report may the investor request the first-level review?

This answer uses the stated review window and calendar-day basis. The SCORES FAQ provides 15 calendar days from receipt of the Action Taken Report for seeking review. The 21-calendar-day entity-response period is a different stage. Remember: Identify whose action is due before recalling the deadline.

Hint Common mistake: Using the entity’s response period for the investor’s review request.

VII-115

From the practice bank · 10

While a complaint is pending on SCORES, the investor opts for Online Dispute Resolution for the same matter. What happens to the complaint on SCORES?

This answer states the forum-status consequence. The SCORES FAQ says the pending complaint is treated as disposed when the complainant opts for ODR. That disposal does not establish who is right or amount to an arbitral award. Remember: Disposed on SCORES does not mean adjudicated in favour of either party.

Hint Common mistake: Reading a closed platform status as a merits decision.

VII-116

From the practice bank · 11

An eligible investor’s admitted claim against an NSE defaulter is ₹8 lakh. The investor has already received ₹3 lakh against that claim from the defaulter’s assets. Assuming no other recovery or adjustment and a non-binding IPF ceiling, what amount remains to be considered for IPF compensation?

This answer is the admitted amount still unmet under the stated assumptions. Unmet claim = admitted claim − recovery already received. ₹8 lakh − ₹3 lakh = ₹5 lakh. The question assumes eligibility and that the ceiling is not binding. It does not promise payment or add the recovery to the claim. Remember: Account for recovery before calculating an unmet claim.

Hint Common mistake: Treating a compensation ceiling or admitted claim as an automatic additional payment.

VII-117

From the practice bank · 12

A client disputes having placed a trade by telephone. Assuming a normal call with no recording failure, which record most directly addresses whether the client gave that order?

This answer directly records the disputed instruction. The relevant issue is whether the client gave the telephone instruction. A recording of that instruction directly addresses it. The inspected SEBI provision includes telephone recordings as order evidence. A contract note alone shows execution rather than the original instruction. Remember: Match the evidence to the disputed fact.

Hint Common mistake: Treating proof that a trade occurred as conclusive proof of client authorisation.

VII-118

From the practice bank · 13

A person wants to report information suggesting securities-law violations, rather than seek redress of a personal service complaint. Which SEBI portal is specifically intended for that information?

This answer matches the purpose described. The stated purpose is to provide intelligence about possible securities-law violations. SEBI’s Market Intelligence Portal is designed for that information. SCORES and ODR serve different complaint or dispute functions. Choosing an information-reporting channel does not establish that a violation occurred. It provides material for the relevant authority to consider. Remember: Match the reporting route to whether the matter is information about a possible violation or a personal grievance.

Hint Common mistake: Submitting every market concern as though it were an individual compensation dispute.

VII-140

From the practice bank · 14

A client’s purchase executes and settles correctly. The shares later fall in price. No broker default, expulsion or unpaid intermediary claim exists. Does that price loss itself establish an eligible NSE IPF compensation claim?

This answer identifies the relevant missing claim category. The scenario expressly excludes member default, expulsion and an unpaid intermediary claim. NSE describes IPF compensation in terms of eligible admitted claims remaining unmet against defaulter or expelled members. An ordinary subsequent price fall does not itself create that claim. This distinguishes the claimed basis, rather than predicting the outcome of a different fact pattern involving misconduct or default. Remember: Identify the claim’s cause rather than treat any financial loss as an IPF event.

Hint Common mistake: Confusing protection against qualifying intermediary default with protection against price declines.

VII-141

From the practice bank · 15

Under the SCORES FAQ, within what period from the date of the cause of action should an investor lodge a complaint on SCORES?

One year is the period stated for lodging the complaint. The question starts the clock at the cause of action, not at receipt of an Action Taken Report. The SCORES FAQ states a one-year filing period and indicates that complaints beyond it may be rejected. This is the platform’s filing rule. It is not a statement that all other legal remedies cease after one year. Remember: Associate each deadline with its triggering event and procedural stage.

Hint Common mistake: Using the review window to answer an initial-filing question.

VII-142