RESOLUTION OF CLAIMS THROUGH ARBITRATION

With a view to ensure speedy & effective resolution of claims between non-members (clients/investors) & members and members inter-se, the Exchange has laid down a Arbitration Procedure which is duly embodied in the Rules, Regulations & Bye-laws of the Exchange.

The Exchange amended its Arbitration Bye-laws in conjunction with the Arbitration and Conciliation Act, 1996 and got approved the same by SEBI under the Securities Contracts (Regulation) Act, 1956. Amended Arbitration Bye-laws of the Exchange became effective from 22.05.99.

All transactions of sale and purchase of securities entered into on the trading platform of the Exchange are subject to Kanpur Jurisdiction and all claims arising in respect of such transactions should be referred to and decided by Arbitration in the Exchange as provided in the Rules, Bye-laws and Regulations of the Exchange. An Arbitration Petition is registered as a Arbitration Case in the Grievances Deptt. of the Exchange only if same is filed alongwith Arbitration Application Form (as specified in Regulations of the Exchange) and after depositing the requisite Arbitration Fees (same also specified in Regulations). Presently Arbitration Fees is Rs. 1,000/-.

However, when a claim from a non-member against a member or a claim of member inter-se is filed without the Arbitration Application Form and without depositing the requisite Arbitration Fees and, if prima facie same appears to be related with Securities (Shares) transaction/s done on this Exchange, then same is registered by the Grievances Deptt. of the Exchange by giving it a claim No. and then a copy of the claim letter is sent to member for his reply.

For resolution of a claim, replies, rejoinders and documents submitted by the parties are exchanged between them and they are called before the Grievances Committee (Appointed by Board of Directors of the Exchange) of the Exchange on fixed hearing dates. Claim is investigated by the Grievances Committee and, for the purpose of investigation, documentary evidence e.g. Contract Notes, Bills and Statement of Account are called from the parties. Grievances Committee make all efforts to get settled the claim amicably as per Rules, Regulations & Bye-laws of the Exchange but, if claim is not settled amicably, then Grievances Committee decide the claim on the basis of versions of both the parties, documents on record and its investigation.

Within one month of the decision of the Grievances Committee, any party aggrieved with that decision may file an Arbitration case in the Exchange but, if aggrieved party is a member, then he will have to deposit the amount decided by the Grievances Committee in the Exchange towards security of Arbitration case.

Pursuant to instructions from SEBI, every year the Exchange appoint a Arbitration Committee (Panel) comprising of 40% of the Members of the Exchange and 60% outsiders i.e. those who are not members of the Exchange.

After filing of Arbitration case, Managing Director appoints a Sole Arbitrator out of the Arbitration Committee (Appointed by Board of Directors of the Exchange and approved by SEBI) of the Exchange. Grievances Deptt. provide administrative assistance to the appointed Sole Arbitrator to facilitate him to smoothly conduct within the Exchange premises the Arbitration proceedings in accordance with the Arbitration and Conciliation Act, 1996 as well as Rules, Regulations & Bye-laws of the Exchange. After  proceedings appointed Sole Arbitrator pronounces Arbitration Award.