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5.4 Investor Grievance Redress Mechanism

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NISM-Series-V-A: Mutual Fund Distributors Certification Examination Exam

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1 Chapter 1: Introduction & Exam Overview

1.1 About the NISM-Series-V-A Examination 1.2 The 12-Unit Curriculum Map and a Study Plan

2 Chapter 2: Investment Landscape

2.1 Investors and Their Financial Goals 2.2 Savings or Investments? 2.3 Different Asset Classes 2.4 Investment Risks 2.5 Risk Measures and Management Strategies 2.6 Behavioural Biases in Investment Decision Making 2.7 Risk Profiling 2.8 Asset Allocation and Do-It-Yourself versus Professional Help

3 Chapter 3: Concept and Role of a Mutual Fund

3.1 Concept of a Mutual Fund 3.2 Classification of Mutual Funds 3.3 Growth of the Mutual Fund Industry in India

4 Chapter 4: Legal Structure of Mutual Funds in India

4.1 Structure of Mutual Funds in India 4.2 Key Constituents of a Mutual Fund 4.3 AMC Organisation Structure and Service Providers 4.4 Role and Function of AMFI

5 Chapter 5: Legal and Regulatory Framework

5.1 Role of Regulators in India 5.2 Role of SEBI and the Mutual Fund Regulations 5.3 Due Diligence Process by AMCs for Distributors 5.4 Investor Grievance Redress Mechanism 5.5 AMFI Code of Conduct for Intermediaries

6 Chapter 6: Scheme Related Information

6.1 Mandatory Documents I: Scheme Information Document and Statement of Additional Information 6.2 Mandatory Documents II: Key Information Memorandum and the Advertisement Code 6.3 Non-Mandatory Disclosures

7 Chapter 7: Fund Distribution and Channel Management Practices

7.1 The Role and Importance of Mutual Fund Distributors 7.2 Different Kinds of Mutual Fund Distributors 7.3 Modes of Distribution 7.4 Pre-requisites to Become a Distributor of a Mutual Fund 7.5 Revenue for a Mutual Fund Distributor 7.6 Commission Disclosure Mandated by SEBI 7.7 Distributors versus Investment Advisers, Nomination Facilities and Change of Distributor

8 Chapter 8: Net Asset Value, Total Expense Ratio and Pricing of Units

8.1 Fair Valuation Principles 8.2 Computation of Net Assets of a Scheme and NAV 8.3 Dividends and Distributable Reserves 8.4 Entry and Exit Load and Its Impact on NAV 8.5 The Expense Ratio Framework: Base Expense Ratio, Brokerage and Statutory Levies 8.6 Key Accounting and Reporting Requirements 8.7 NAV, Total Expense Ratio and Pricing of Units for the Segregated Portfolio

9 Chapter 9: Taxation

9.1 Applicability of Taxes in Respect of Mutual Funds 9.2 Capital Gains on Mutual Fund Units 9.3 Dividend (IDCW) Income and Tax Deducted at Source 9.4 Stamp Duty and Securities Transaction Tax on Mutual Fund Units 9.5 Setting Off Capital Gains and Losses under the Income Tax Act 9.6 Tax Benefit under Section 80C and Applicability of GST

10 Chapter 10: Investor Services

10.1 The New Fund Offer Process 10.2 New Fund Offer Price and Ongoing Offer Price for Subscription 10.3 Investment Plans and Services 10.4 Allotment of Units and Account Statements 10.5 Mutual Fund Investors: Who Can Invest 10.6 Filling the Application Form for Mutual Funds 10.7 Financial Transactions with Mutual Funds 10.8 Cut-Off Time and Time Stamping 10.9 KYC Requirements for Mutual Fund Investors 10.10 Systematic Transactions and Their Operational Aspects 10.11 Non-Financial Transactions, Special Investor Categories and Turnaround Times

11 Chapter 11: Risk, Return and Performance of Funds

11.1 General and Specific Risk Factors 11.2 Factors That Affect Mutual Fund Performance 11.3 Drivers of Returns and Risk in a Scheme 11.4 Measures of Returns 11.5 SEBI Norms Regarding Representation of Returns 11.6 Risks in Fund Investing: The Investor's Perspective 11.7 Measures of Risk and Provisions Relating to Credit Risk

12 Chapter 12: Mutual Fund Scheme Performance

12.1 Benchmarks and Performance 12.2 Price Return Index or Total Return Index 12.3 Basis of Choosing an Appropriate Performance Benchmark 12.4 Benchmarks for Equity Schemes 12.5 Benchmarks for Debt Schemes and Other Schemes 12.6 Quantitative Measures of Fund Manager Performance 12.7 Tracking Error and Scheme Performance Disclosure

13 Chapter 13: Mutual Fund Scheme Selection

13.1 Scheme Selection Based on Investor Needs, Preference and Risk Profile 13.2 Risk Levels in Mutual Fund Schemes 13.3 Scheme Selection Based on Investment Strategy 13.4 Selecting a Scheme Across AMCs or Within a Scheme Category 13.5 Selecting Options in Mutual Fund Schemes and Do's and Don'ts

5.4 Investor Grievance Redress Mechanism

Key Takeaways Explain This Topic AI

An investor must first raise the complaint with the AMC's investor relations officer before escalating.

SCORES is SEBI's online complaint platform, relaunched as SCORES 2.0 in April 2024 with auto-routing and defined timelines.

An entity must submit an Action Taken Report on SCORES within 21 days of receiving the complaint.

An investor may seek a first review within 15 days of the Action Taken Report and a second review thereafter.

SEBI's Online Dispute Resolution portal provides conciliation and then arbitration for unresolved disputes.

Last updated: August 2026

Step One: The AMC

Every mutual fund must designate an investor relations officer whose name, address, telephone number and email are disclosed in the Scheme Information Document and on the AMC website. The investor must approach the AMC first. SEBI's platform is an escalation mechanism, not a first port of call, and a complaint lodged without approaching the entity is normally routed back to it.

The trustees oversee complaint handling. Complaint data — received, resolved, pending, and by category — is disclosed in scheme annual reports, which makes a pattern of unresolved grievances visible.

A distributor's role at this stage is practical: help the investor state the complaint precisely, with folio number, transaction date and the specific grievance, because vague complaints resolve slowly.

Step Two: SCORES

SCORES — the SEBI Complaints Redress System — is SEBI's web-based platform for securities market complaints. SCORES 2.0 was launched in April 2024 with automated routing, monitoring of timelines, and a structured two-level review.

How it works:

The investor lodges the complaint online against the AMC or intermediary.

It is auto-routed to the concerned entity and to a designated body — for mutual funds, an industry-level body that supervises redress.

The entity must submit an Action Taken Report (ATR) within 21 days of receipt.

If the investor is dissatisfied, a first-level review may be sought within 15 days of the ATR. The designated body examines the matter and files a further ATR.

If still dissatisfied, a second-level review may be sought within a further 15 days , at which point SEBI itself examines the complaint and responds.

  • Stage Actor Timeline
  • Complaint lodged Investor —
  • Action Taken Report Entity 21 days
  • First review request Investor Within 15 days of ATR
  • First review Designated body Files further ATR
  • Second review request Investor Within a further 15 days
  • Second review SEBI SEBI examines and responds

SEBI publishes monthly data on complaints received and disposed through SCORES.

Step Three: Online Dispute Resolution

Where a matter is not resolved through SCORES, or where the investor prefers a dispute-resolution route, SEBI's Online Dispute Resolution (ODR) mechanism provides a common portal linking market participants to ODR institutions.

ODR proceeds in stages:

  • Pre-conciliation and conciliation — a neutral conciliator attempts a settlement
  • Arbitration — if conciliation fails, the dispute goes to online arbitration, producing a binding award

Once a matter is taken into ODR, the entity may file an ATR on SCORES stating that the subject matter has concluded in the ODR mechanism, and the SCORES complaint is treated as disposed. Conclusion in ODR at any stage — pre-conciliation, conciliation or arbitration — is sufficient for this purpose.

ODR is significant because it gives investors an adjudicatory route with a binding outcome, which SCORES does not provide: SCORES secures a response and regulatory attention, but does not award compensation.

Other Avenues

SEBI toll-free helpline — 1800 266 7575 or 1800 22 7575, for guidance on process.

Consumer forums and civil courts — remain available; investors are not obliged to exhaust the securities market route.

SEBI Investor Protection and Education Fund — funds investor education and, in specified circumstances, certain investor claims.

What Complaints Actually Concern

In practice, mutual fund grievances cluster in a small number of categories:

  • Non-receipt of redemption proceeds or income distribution
  • Non-receipt or error in account statements
  • Delay or error in a non-financial change — bank mandate, address, nomination
  • Transmission difficulties on death of a unitholder
  • Mis-selling — a scheme sold as guaranteed, a horizon mismatch, unexplained switching
  • KYC status issues blocking transactions

The first four are operational and usually resolve at the AMC or RTA. The mis-selling category is where the distributor's own documentation becomes decisive: a dated risk profile and a written recommendation basis is the difference between a defensible file and an indefensible one.

The Distributor's Obligations

Under the AMFI Code of Conduct a distributor must assist investors in the redress process rather than obstruct it, must not discourage escalation, and must provide the records needed. A distributor who tells an investor that complaining will jeopardise their investment has committed a conduct breach independent of whatever the original grievance was.

What Makes a Complaint Actually Move

Most delay in grievance handling is caused by the complaint, not by the entity. A complaint that resolves quickly contains six things, and a distributor helping an investor prepare one should check for all of them:

  • Folio number and PAN , so the record can be located immediately
  • Scheme name, plan and option , stated exactly
  • Date and amount of the transaction complained about
  • What was expected and what happened , in one or two sentences

Supporting documents — account statement, transaction acknowledgement, bank statement showing a credit that did not arrive

What resolution is sought , stated explicitly

A complaint reading only that the money has not come is routed, queried, re-routed and eventually answered with a request for the folio number, and three weeks are lost.

What Each Forum Can and Cannot Deliver

  • Forum What it delivers What it does not
  • AMC investor relations officer Operational correction, explanation An independent view
  • SCORES A response under supervised timelines, regulatory visibility Compensation or an award
  • ODR A binding outcome through conciliation or arbitration Speed comparable to an operational fix
  • Consumer forum or civil court A legal remedy Any of the above quickly

Setting this expectation early prevents a second grievance about the grievance process. An investor who lodges a SCORES complaint believing it will award damages will be disappointed by an outcome that was never available there.

Complaint Data Is Public

Every scheme's annual report discloses complaints in a prescribed format — received, resolved, pending, and the ageing of unresolved items, broken down by complaint type. SEBI also publishes monthly SCORES data by entity. Both are worth a look before recommending an AMC to an investor, because a persistent cluster of unresolved service complaints is a fact about the fund house that no performance table will show.