Complaints against brokers/listed companies – Your Guide to NSE Investor Services Cell for complaints

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National Stock Exchange

 

The NSE is the National Stock Exchange, which, apart from facilitating the listing and trading of shares of companies also tries to protect investors’ interests. This is welcome because generally, the bargaining power of individual investors may not match up to the might of listed companies and therefore, where an investor has a grievance against a broker or a listed company, it may not always be easy to get proper relief. To help investors resolve such complaints, the NSE has its own complaint and grievance redress mechanism, in the form of the “Investor Services Cell” (the Cell). The Investor Services Cell also provides assistance in arbitration proceedings under the Exchange’s Arbitration Framework.

Every individual who holds shares in a company is referred to as an ‘investor’, and persons permitted to trade in securities listed on the NSE are referred to as ‘Trading Members’. These trading members (such as stock brokers, banks, securities firms, etc.) are approved by the NSE to trade shares on the NSE screen system.

The purpose of the Investor Services Cell of the Exchange is to deal with complaints of investors against:

  • Trading Members of the Exchange; or
  • Companies listed on the NSE.

Complaints may range from minor glitches in online trading, to non issue of important documents by listed companies. Some typical complaints have been described below:

Complaints against Trading Members

The Cell accepts a wide range of complaints against Trading Members such as:

  • Non-issue of documents to the investor by the Trading Member (such as Know Your Client Form (KYC), Member Constituent Agreement (MCA), Risk Disclosure Document (RDD), Statement of Accounts  for Funds or Securities, Margin Statements, Contract notes etc).
  • Non-receipt of funds, securities or margin by the investor after instructing a Trading Member to trade in the same (for example, if you instruct a broker to sell your shares in a particular company, and he does so but does not transfer the sale proceeds to you);
  • Non-return of security deposit by the trading member (this could be a security deposit by cheque or in the form of securities);
  • Non-receipt of amounts such as dividends on shares or interest on debentures by investors (for example, where you are entitled to a corporate benefit such as issue of shares in a Bonus issue, Stock Split, Merger, De-merger, Dividend Issue, etc,  and the Trading Member does not transfer such benefits to you);
  • Execution of trades without the consent of the investor;
  • Charging of excess brokerage by a trading member or sub-broker, i.e. charging brokerage in excess of permissible limit of 2.5%, or charging a different brokerage than was mutually agreed in writing;
  • Non-receipt of credit balance as per the statement of account.
  • Claiming losses due to a fault of the broker: Stock brokers can be held accountable for “opportunity losses” due to technical glitches while trading through online platforms.

An important ruling on this point was delivered by the Delhi High Court in a case filed by a retail investor against Reliance Securities. The investor complained that despite his instructions to sell some of his shares, the trader did not carry out the transaction on time due to technical faults, and the investor made a loss on the sale as the transaction was delayed. The Delhi High Court upheld the lower court’s judgement and held that where an investor places an order for sale or purchase of securities with a trader, and due to some fault of the online trading system, the transaction does not go through, then the trader must compensate for the investor’s loss (here, a delayed sale executed by the trader resulted in losses for the investor). It also held that such losses cannot be considered to be “notional”, i.e., not actually existing since the potential gain (which would have gone into the investor’s pocket if the sale had been conducted on time) did not actually happen. In addition, the court held that the investor cannot be held responsible for other causes of glitches such as the trader being unable to contact the investor’s bank to arrange for a transfer of funds, etc. This ruling  has made it necessary for brokers to ensure that investors trading online with them need to be given a smooth, glitch-free procedure and the traders themselves are responsible for getting the right technology to ensure this. If this is not so, the investor may claim his/her losses back from the broker.

Complaints against Listed Companies

An investor may make complaints against Listed Companies to the Investor Services Cell. Some Typical complaints are as follows:

  • In a public offering of shares(such as initial public offerings (IPOs) follow-on public offerings, Rights Offers or Preference offers), a complaint may be filed if the investor does not receive:
    • allotment advice;
    • the securities purchased in the public offer;
    • refund amounts for securities paid for but not allotted;
    • interest on delay in redemption amounts or refund amounts due to the investor;
    • Composite Application Form for a Rights Offer;
    • a letter of offer in a buyback of shares by the company; and
    • sale proceeds in case of a bonus issue, stock split, etc.
  • In corporate actions (such as declaration of dividend, mergers, bonus issue, etc) an investor may lodge a complaint where he has not received his dues, such as:
    • declared dividend;
    • interest on Debentures, Bonds or other Debt Instruments;
    • redemption amounts in relation to instruments such as shares, debentures, bonds or units;
    • securities (i.e., shares, debentures, bonds or units) on account of a Bonus Issue, De-merger, Merger or Stock Split.
  • In case of transfer of securities, investors may file complaints:
    • where securities are not received after dematerialization (i.e., the process whereby securities are converted into dematerialized digital form) or transfer; or
    • where duplicate certificates of securities are not received;
  • Complaints may also be filed for other matters, such as where copies of the company’s Annual Reports are not sent to the investor.

 

  • Regional Investor Complaint Resolution Committees: Where complaints remain unsolved despite the intervention on part of the Exchange, the investors may approach Regional Committees, which are situated at Mumbai, Delhi, Kolkata and Chennai.

Which complaints are not taken up by the Cell?

The following types of complaints against Trading Members will not be taken up by the Cell:

  • Complaints relating to trades not executed on the Exchange;
  • Claims of a broker for private commercial dealings with the trading member;
  • Claims relating to loans or other financing arrangements (which are not within the framework of the stock exchange);
  • Complaints in relation to transactions which are already the subject matter of Arbitration proceedings;
  • Complaints involving payment of funds and transfer of securities to entities other than a Trading Member; and
  • Claims for mental agony/harassment and expenses incurred for pursuing the matter with the Cell.

The following types of complaints against Companies will not be taken up by the Cell:

  • Complaints relating to securities not listed on the Exchange;
  • Complaints for refund of postal charges, telephone expenses and miscellaneous charges;
  • Compensation for mental agony, harassment, etc;
  • Notional loss due to delay in receipt of shares sent for transfer or after IPO;
  • Complaints not related to the Exchange;
  • Complaints relating to pledge and assignment of shares; and
  • Complaints where the complainant is unable to establish ownership of the shares or other security.

 

How do I lodge a complaint with the Cell?

Investors may lodge complaints with the Cell in the format prescribed by the Exchange (explained further below) along with the supporting documents either:

Format

There are two forms to file complaints with the Cell:

  • the Investor Complaint Form-TM is used to lodge complaints against trading members or registered sub-brokers; and
  • the Investor Complaint Form – CO is used for complaints in relation to companies traded on the National Stock Exchange.

These forms are accessible on the NSE website www.nseindia.com, under the link “Investors”.

The form contains details of the investor, the trading member, and the complaint. Depending upon the nature of the complaint, it may be necessary for the complainant to provide copies of some relevant documents. For instance, in case of complaints in relation to companies, the following documents may be relevant:

  • statement of holding;
  • counter part of application form/ composite application form for issue of shares;
  • copies of bank statement / passbook;
  • acknowledgement by syndicate member or bank;
  • copies of allotment advice, share / debenture / bond certificate, letter of entitlement, etc;
  • copies of relevant acknowledgements;
  • copies of relevant letters issued by company, any transfer deed, etc;
  • copies of acknowledgement (s) given by company, indemnity bond, any FIR filed with police, etc.

What happens when a complaint is lodged with the Cell?

Complaints against Trading Members

In cases of complaints against Trading Members and sub-brokers, once the complaints (and the relevant documents) are received by the Cell from the investor, they are forwarded to the Trading Member or sub-broker, asking them to provide their comments or to resolve the case. The Trading Members are expected to file their reply within 21 days. If the Trading Member or the registered sub-broker disputes the claim of the investor, the response of the Trading Member is forwarded to the investor. If required, both the parties are called for a joint meeting to resolve the dispute.

In cases where the disputes remain unresolved, the parties may refer the matter to Arbitration.

Complaints against Companies, Share Transfer Agents (STAs) & Registrars.

Complaints received from investors are forwarded to the respective Companies/STAs for necessary action at their end. If no response is received from the company/STAs within 21 days, a follow-up by way of letters, telephone calls and personal meetings is undertaken to expedite their replies.

All in all, the Cell will do its best to try to get the company or broker to resolve your complaint. The advantages of going through the Cell rather than filing a complaint with the company or broker yourself is that they are more likely to respond to the Cell which is affiliated to the NSE.

 

See more articles on Finance sector here.

 

See more company pages:

BEETAL Financial & Computer Services Complaint

CCAvenue Complaint

CMS Securities Limited Complaint

Karvy Stock Broking Limited complaint

File your consumer complaint here

19 thoughts on “Complaints against brokers/listed companies – Your Guide to NSE Investor Services Cell for complaints”

  1. Subject: CREDITING OF RIGHT SHARE WITHOUT ANY PERMISSION
    KINDLY HELP ME SIR
    ————————————–
    Respected Sir/Madam,
    This to inform to you that I have a account at “Guiness Security Ltd.”(DPID:-IN302898Clint Id:10095564and my Trading Ac no:-s 2980).from 2008.
    I have shares of pull holding ASTAL COOK-1000,BAJAJ HIND-1000,IB SEC-2700,REL POWER-27,SPENTEX-50 in my account
    Inspite of my request my shares had been kept in pull account without transferring in demat account during two years.Inspite of my trading account having in credit balance during two years.
    But company did not provided any contact note and any statements during this tenure.I already informed to you that 2000 Bajaj Hindusthan Ltd right issue shares had been creadited without any permission of me.For this reason,my account had been gone to debit account of large amount. Again 2000 Bajaj Hindusthan Ltd right issue shares ,1000 Bajaj Hindusthan Ltd shares of my holding and 200 I.B. SEC shares had been sold without any permission.It also transferred shares from my demat to pull account without any permission.

    I am Subrata Das,citizen of West Bengal requesting to take proper step against what ever had been done without my permission
    If you peacefully solve my problems I shall be grateful to you.

    Yours Faithfully
    SUBRATA DAS
    Email id: subratadaslic@yahoo.com
    20 02 2012
    Subrata Das,
    169 purasree ,
    Chandannagar,
    Dist-Hooghly,W.B.-712136
    Clint no:10095564
    Trading Ac no:-s 2980
    PH-+919681041417

    Reply ↓

  2. My complaint is against INDIA INFO LINE. They have taken the deposit of Rs. 30000 which will be given back reversal. When i demanded my money they said we will not give back. Not only that my account has zero balance in the commodity. They are now forcing me to pay the margin money for the commodity having zero balance or else they are saying me that they will sell my scrips in the equity market.

    They are also not allowing me for the offline transfer of my stocks to other brokerage house.

    Please guide my what to do on kariajigar@yahoo.co.in

    Please help me….

    Reply ↓

  3. from: pundalika prabhu, no. j48, 7th cross, 1st main road, gayatrinagar, near 82 bus stop, bangalore-560 021. ph. no. 8722969974, 7899979924

    i had a trading account no. pp101523 with stock holding corp. of india ltd., malleswaram, banalore ( manager name ; sunil gururaja – ph. 9448400464, landline no. 080 23461225) and in 2009 May, their trading representative sold 1000 quantities of Sesa Goa shares at rs. 140 in my account and at close they did not square off the buy back of shares on the same day, i.e. 18 may 2009, friday, and later they told that the shares were not covered up. on monday, 21, may 2009 the shares of sesa goa ltd jumped up by rs. 50 and on the 3rd day, they told that it went for auction and the shares were covered up for rs. 180 plus auction charges, resulting in a total loss of rs. 44000. their manager, assured that they will find a solution and give back the loss of rs. 44000 to me and they again and again assured the same and they had spent almost 2.5 years time by now. later they are taking the matter very lightly, not giving value to their valued customer.
    kindly help me to get the amount totalling to rs. 44000/- and penalty, interest recovered with interest and penalty in favour of me. my email id is mymail.pp@gmail.com (ph. 8722969974, 7899979924) with address mentioned above. since the amount of loss is not negligible, please help me at your earliest.

    kindly do the needful and awaiting your valued response at the earliest.

    pundalika prabhu.r.
    client id. pp 101523

    Reply ↓

  4. m/s.mehta equities ltd has not paid our brokerage amount of rs.90,000/- aprox because we have closed our sub broker branch broker deduct tds but not paid brokerage amount to us we are regular follow on telephone but not responce

    Reply ↓

  5. I (vijay kumar choudhary ) opened a d-mat and trading a/c with Indian Finance guaranty ltd (IFGL) in the name of my properitorship firm SPEED TRACK CARGO. and my client code is DG 26

    After a/c opening I have transferred shares of rs. 19 lacs. (22000 HDIL) and chq of rs. 14 lacs as margin money for trading in the name of INDIAN FINANCE GUARNTY LTD IFGL started doing trading in my a/c . I don’t know anything what they people are doing in my code… they were doing trading in their own . sometimes in the evening they will only a single call that is also a formal call. When I asked about the profit & loss in my a/c they told me that thing will be explained later.. but after that nobody confirmed me the ledger balance in my a/c and profit & loss.. everytime when I called at the company’s no. they told me that sir we will calculate after the market hours then we will let you know. In reality company is trying to make me fool.

    When I confirmed about my ledger in march I shocked to know that only 6 lacs are left in my a/c. I have given total amt of approx. 30 lacs to IFGL. Company has done fraud of rs. 24 lacs of mine..i really dnt knw anything what they people did in my a/c. I was shocked to see my loss of 24 lacs. Nobody is there to tell me anything how does it happen.

    Regards

    SPEED TRACK CARGO
    (VIJAY KUMAR CHOUDHARY)
    9312321430

    Reply ↓

  7. i have an account with fairwealth securities ltd.when i trade the brokerage rate which is deduct from my ac that is 2.17% on intraday on side which is so high & inspite of requesting again & again it is not solved.it’s an integrity issue. now i need to help to register my complain against that company to nse & sebi. please help me.
    mehabub alam,ph-9679196569
    mehabubdot@gmail.com

    Reply ↓

  8. Hi sir,

    this is prashant kuldeep & i traded in nse & bought stock of vikash metal & hitech plast & now these companies are not trading for last few days in NSE so what should i do?

    thanks

    Reply ↓

  9. FAIRWEALTH SECURITIES Nehru Place.

    Cheater Persons: Mr. KP Shukla, Mr. Avdesh, Mr. Achal

    The trade operator has agreed for the fraudulent trading into the mentioned account in presence of all the concerned personnel’s of FAIRWEALTH SECURITIES i.e without consent of the account holder.

    Even the branch manager is involved in the same. But the MD of company is doing nothing. Where to lodge complaints. Police, SEBI or beat out these people.

    They have given me trading loss of more than 2L.

    Reply ↓

  10. Dear Sir

    This is to inform you that I have been trapped by one of your executive.I took sub-brokership from you company by depositing a security of Rs.30000 about 4 months ago.
    Mr. Sunil Jha ( Company's Executive) came to me as your representative.He told me that the deposit is refundable.
    I started the franchise but the service was not consulting. So I wanted to end the agreement between the two.
    I asked my security back but now they say that the deposit is not refundable and that security has been deposited as advanced brokerage.
    When we asked for help from company's officials they even didn't responded to us.
    We asked them that if they are not going to help we have to approach higher authorities.
    They said that no one can do anything of them as if they are bullies.
    We even approached Mr. Kamal Nasir , Mr. Rohit Khandelwal , Mr.Tirupati Rao (All from Delhi Branch).But they are not able to do anything.They are just deaf and dumb. They are just working as cheating executives of company.
    They don't have any solutions.
    Is it good for a reputed company like CD Equisearch that their high officials are doing such things?
    This type of response is downgrading the reputation of our company.
    It seems that condition of company is so bad that they are not able to earn from brokerage and doing such frauds to pay heavy salaries to their cheater executives who can trap the people.

    I am writing this mail in hope that you the Director Of Company will listen to my grievance and try to solve this matter out.
    Because you are the highest authority whom I can contact and your actions can effect your company.

    I hope that my deposit will be refunded soon as I think that Rs.30000 is not more important than company's reputation.

    Sub-broker name – MEENA AGGARWAL.
    Sub-broker ID – ED89S01.

    Reply ↓

  11. Investor Protection Group.
    FIR HAS BEEN REGISTERED AGAINST NATIONAL STOCK EXCHANGE OF INDIA (NSE).
    CASE has been registered against MANAGING DIRECTOR, DIRECTORS, COMPLIANCE AND INSPECTION OFFICERS OF NSE, BROKER ETC, under the following acts:
    (i) IPC 1860: 467/120B/468/409/471/420/477A.
    (ii) INFORMATION TECHNOLOGY ACT 2000 66.

    DETAILS OF FIR CAN BE TAKEN FROM FOLLOWING WEBSITE LINK:
    http://delhipolice.serverpeople.com/firweb/Index.aspx?SubMenuId=2

    AND FIRST INFORMATION REPORT (FIR) DETAILS ARE :
    District: CRIME AND RAILWAYS, P.S.: E.O.W , FIR No.:48 Date:11-03-2013 Year: 2013.

    IF ANY GRIEVANCES CONTACT -
    IPG – SACHIN – 8802229962.

    Reply ↓

  12. I know a broking firm where my friend is working. which is cheating employees and clients. they have used client securities and have hypothecated them for loan without consent, they are diverting money from client account to business / personal account, clients are not getting their pay outs. employees have not been paid salary for 3 months. they are scared to report matter as they will then not get paid their dues. clients are scared to take legal route as they small investors.

    Reply ↓