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The Securities and Exchange Board of India (SEBI) today extended the time to three years for filing complaints against entities, up from six months — a move which experts said will enable investors to study in greater details the issues involved in the cases to be contested.
“...it has been decided that the limitation period... shall be applicable to cover... (cases) where three years have not yet elapsed and the parties have not filed for arbitration with the stock exchange,” the market regulator said in an order.
It added that the new order will also be applicable to cases where the arbitration application was filed but was rejected solely because of delay in filing within the earlier period of six months, provided three years have not yet elapsed from the case.
Experts said the extension of the time limit will benefit investors.
“It will give more flexibility to investors and complainants who will now have more time to study and analyse the case,” said the SMC Global Securities strategist and head of research, Mr Jagannadham Thunuguntla.
He said the change could well mean increase in complaints in the short run by investors whose litigations date back to the recent past but had come under the statute of limitation due to the earlier rule.
SEBI has asked stock exchanges to take measures for enforcing the new order.
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