Mutual fund investments are an indispensable part of the investment portfolio. They are a very convenient investment option for every kind of investor as they can provide returns that can beat inflation at the same time are less risky as compared to investment in pure equities. But what if you have any complaints against mutual funds? Where do you go to resolve your issues? What is the process for the same?
Given below are the answers to these questions and the detailed process to lodge any complaint against mutual funds.
Why would an investor need to complain against mutual funds?
Mutual funds are available in multiple categories and can provide regular returns in the form of interest or dividends or provide growth options where the wealth of the investors is increased multifold. However, there can be various issues related to mutual funds that investors can face. Investors can then complain about such issues to the appropriate authorities like SEBI and AMFI through their prescribed channels. Some of the common issues that investors can complain about can be
- Non-payment of dividends
- Non-transfer of securities
- Breach of contract by any party
What are the stages of complaining against mutual funds?
Mutual funds are a structured and regulated environment and there are two stages or levels where the investors can address their grievances. These stages and the scope of the regulating authority are mentioned below.
- AMC or Distributor
When the investor has any issue related to the mutual funds, the first point of reference is approaching the broker, the distributor, or the AMC. Investors can contact their brokers through customer care services and try to get a resolution for their issues. Investors can also contact the AMC through their agent or personnel in charge of seeking resolution for the investor grievances. Minor issues usually get resolved at these levels and the investor does not need to take any further action regarding the same.
Read more: Roles and responsibilities of an Asset Management Company
- SEBI
When any investor issues are not resolved at the primary level of the broker or the AMC, or if they find the solution unsatisfactory, they can approach SEBI. SEBI has launched ‘SCORES’ which is a centralized portal for grievance redressal. Investors can use this portal to register their grievances against any company, any AMC, or any intermediary that has defaulted on recognized accounts. They can launch their complaint through this online portal and get solutions to their grievances within a period of 30 days.
What are the steps for registering a complaint with SEBI?
SCORES stands for SEBI Complaints Redressal System and is the online portal of SEBI for addressing any kind of issue. The steps for registering a complaint on SCORES are mentioned hereunder.
- The first step is to register on the SCORES portal using valid credentials by submitting basic KYC documents like PAN card, name, address, and mobile number. After providing these details and successful verification of the same, the user will get their credentials on the email ID provided by them.
- The user can then register their complaint by logging in through the credentials generated above and then clicking on ‘Complaint Registration’ under the tab ‘Investir Corner’.
- Investors are required to provide all the relevant details of the complaint under the correct complaint category. They can also attach any documents in PDF format (up to 2 MB in size as supporting evidence for their complaint.
- After the complaint is successfully registered, the user will get a reference number which is a unique registration number on their email, and an SMS confirming the registration of the complaint will also be sent to their registered mobile number.
- Investors can track their complaints through the SCORES portal by quoting this complaint registration number and track the progress of their complaint redressal.
- SEBI will then send the complaint to the relevant fund house or any other relevant party to seek an explanation and the said party is required to provide a written reply for the same. This reply has to be filed with SEBI within 30 days.
- Once the resolution is received by the complainant, if they are not satisfied with the same, they can click on the ‘unsatisfied’ option and provide reasons for the same. Users have to access this option within 15 days of receiving a resolution from SEBI.
- Such a complaint will then be forwarded to the supervisory officer for further review.
- If the complainant is still dissatisfied with the resolution provided at this stage, they can take legal course to remedy the same.
Conclusion
When investors face any issue relating to mutual funds they should always first approach the fund house or their broker to seek immediate remedy. Investors can directly approach the SCORES portal as well and raise the issue but it will be first directed to these primary parties if the investor has not already approached them. The SCORES portal of SEBI is a structured format of grievance redressal and ensures that investors get their complaints resolved at the earliest. Registration to the portal is mandatory for grievance redressal from 1st August 2018.
FAQs
Investors can complain on the SCORES portal for any issues that come under the purview of the following Acts,
-SEBI Act
-Securities Contract Regulation Act
-Depositories Act and rules and regulations made there under
-Relevant provisions of the Companies Act, 2013
Complaints in the following cases cannot be entertained through SCORES,
Complaints that are sub-judice i.e. relating to cases that are under consideration by a court of law, quasi-judicial proceedings, etc.
Complaints against companies, falling under the purview of other regulatory bodies like,
The Reserve Bank of India (RBI)
The Insurance Regulatory and Development Authority of India (IRDAI)
Pension Funds Regulatory and Development Authority (PFRDA),
Competition Commission of India (CCI), etc., or
under the purview of other ministries viz., MCA, etc.
Complaints that are against the companies which are unlisted/delisted, or placed on the Dissemination Board of Stock Exchange.
Complaints that are against a sick company or a company where a moratorium order is passed in winding up / insolvency proceedings/companies order is passed in winding up / insolvency proceedings/companies
nformation relating to personal KYC is mandatory while submitting or lodging a complaint under SCORES like the name and address of the complainant, valid and active mobile number and email ID, PAN Card, etc.
SEBI mandates that the entity can take a maximum of 30 days to respond to the issue raised by the investor.
The toll-free number for queries or issues related to SCORES is 1800 266 7575 or 1800 22 7575. This service is available on all days from 9 am to 6 pm (except on declared holidays in Maharashtra)
