Introduction of Automatic Process and Common Pool of Arbitrators for Stock Exchanges

Currently, the arbitration mechanism of the stock exchanges is decentralized i.e. the selection of arbitrators is done by the respective stock exchanges. However with a view to bring greater transparency and in order to protect the interest of the investors SEBI has made the following changes -

• List of arbitrators maintained by all the stock exchanges having nation wide terminals will be pooled centrally and will be known as "Common Pool" this will be displayed on the website of the stock exchanges
• The arbitrators will be chosen by the parties to the arbitration and the parties fails to choose the Arbitrator it will be chosen by an "Automatic Process" where neither the parties to the arbitration nor the concerned stock exchange will be directly involved. It will be done through automatic computer process
• The Automatic Process will also send a real time alerts to all the entities involved

Arbitration process is widely used by the parties and a centralized process will avoid manipulation.