Description

BSE amends its Rules and Bye-laws to replace 'arbitration' terminology with 'dispute resolution mechanism' and modify authority delegation for trade annulment decisions.

Summary

BSE has amended Chapter IV (Rules) and Chapter VII (Bye-laws) of its Rules, Bye-laws and Regulations. The key changes include: (1) replacing ‘arbitration’ with ‘dispute resolution mechanism’ in misconduct definitions, (2) updating fee terminology from ‘arbitration charges’ to ‘charges towards dispute resolution mechanism’, and (3) removing explicit Board/Managing Director references in trade annulment authority, allowing delegated person(s)/committee(s) authorized by the Board to make such decisions.

Key Points

  • Rule 3(f) amended to replace ‘Failure to submit to or abide by Arbitration’ with ‘Failure to submit to or abide by dispute resolution mechanism’
  • References to ‘Arbitration Committee’ replaced with ‘arbitral tribunal’ in misconduct provisions
  • Rule 3(m) updated to change ‘arbitration charges’ to ‘charges towards dispute resolution mechanism’ for member fee obligations
  • Bye-law 5(b) Chapter VII modified to remove explicit mention of ‘Board or Managing Director’ from trade annulment authority
  • Authority for trade annulment now vested in ‘person(s)/committee(s) authorized by the Board’ without specific designation of Board/MD
  • Trade annulment decisions remain subject to Independent Oversight Committee review on request from aggrieved party

Regulatory Changes

Chapter IV - Rules on Misconduct

Rule 3(f) - Dispute Resolution Compliance:

  • Old: Members guilty of misconduct if they fail to submit to or abide by ‘arbitration’ or awards from ‘Arbitration Committee’
  • New: Members guilty of misconduct if they fail to submit to or abide by ‘dispute resolution mechanism’ or awards from ‘arbitral tribunal’

Rule 3(m) - Fee Payment Obligations:

  • Old: Members guilty of misconduct for non-payment of ‘arbitration charges’
  • New: Members guilty of misconduct for non-payment of ‘charges towards dispute resolution mechanism’

Chapter VII - Bye-laws on Trade Inviolability

Bye-law 5(b) - Trade Annulment Authority:

  • Old: ‘Board or Managing Director or any other person(s)/committee(s) as may be authorized by the Board’ can annul trades
  • New: ‘A person(s)/committee(s) authorized by the Board’ can annul trades
  • Removes explicit mention of Board and Managing Director as primary decision-makers
  • Streamlines authority to delegated persons/committees only

Bye-law 5(e) - Review Mechanism:

  • Trade annulment decisions remain reviewable by Independent Oversight Committee on Trading and Surveillance function upon request from aggrieved party

Compliance Requirements

  • All Trading Members: Must comply with the updated dispute resolution mechanism terminology and procedures
  • All Trading Members: Must pay charges towards dispute resolution mechanism (previously termed arbitration charges) to avoid misconduct designation
  • All Trading Members: Must submit to and abide by decisions of arbitral tribunal under the new dispute resolution framework
  • Exchange Committees/Authorized Persons: Must exercise trade annulment authority in accordance with revised Bye-law 5(b)
  • No immediate action required: These are procedural/terminological amendments to existing frameworks

Important Dates

  • Circular Issue Date: November 20, 2025
  • Effective Date: Not explicitly specified in the circular content provided

Impact Assessment

Market Impact: Low - These are primarily terminological and procedural amendments that do not alter substantive rights or obligations.

Operational Impact: Low to Medium - Exchange members and internal committees need to familiarize themselves with updated terminology. The shift from ‘arbitration’ to ‘dispute resolution mechanism’ reflects modern alternative dispute resolution practices and may provide greater flexibility in dispute handling methods.

Governance Impact: Medium - The removal of explicit Board/Managing Director designation in trade annulment authority represents a governance streamlining, consolidating authority with delegated committees/persons while maintaining Board oversight through the authorization requirement.

Legal/Compliance Impact: Low - Members must ensure compliance documents, internal procedures, and fee payment references align with new terminology. The substantive obligations remain unchanged.

Benefits: Modernizes terminology to reflect current dispute resolution practices, streamlines decision-making authority for trade annulments, and maintains investor protection through Independent Oversight Committee review mechanism.

Impact Justification

Procedural amendments to terminology and governance structure affecting dispute resolution and trade annulment processes for all exchange members