Description

BSE has amended its Rules, Bye-laws and Regulations to replace references to 'arbitration' with 'dispute resolution mechanism' and modified provisions related to trade annulment and price resetting authority.

Summary

BSE has issued amendments to its Rules, Bye-laws and Regulations effective November 20, 2025. The amendments primarily update terminology related to dispute resolution processes and modify governance provisions for trade annulment and price resetting authority. Key changes include replacing references to ‘arbitration’ with ‘dispute resolution mechanism’ and streamlining the authorization process for trade modifications.

Key Points

  • Rule 3(f) of Chapter IV amended to replace ‘arbitration’ with ‘dispute resolution mechanism’ in misconduct definitions
  • Rule 3(m) of Chapter IV updated to change ‘arbitration charges’ to ‘charges towards dispute resolution mechanism’
  • Bye-law 5(b) of Chapter VII modified to change authorization from ‘Board or Managing Director’ to ‘person(s)/committee(s) authorized by the Board’
  • All amendments maintain the substance of obligations while updating procedural terminology
  • Changes apply to member obligations regarding dispute resolution and fee payments

Regulatory Changes

Rule 3(f) - Chapter IV: Misconduct Definition

Old Provision: Members deemed guilty of misconduct for failure to submit to or abide by arbitration or carry out awards/decisions of Arbitration Committee or arbitrators.

Amended Provision: Members now deemed guilty of misconduct for failure to submit to or abide by dispute resolution mechanism or carry out awards/decisions of arbitral tribunal or arbitrators.

Rule 3(m) - Chapter IV: Payment Obligations

Old Provision: Misconduct includes failure to pay subscription, fees, arbitration charges or other dues.

Amended Provision: Misconduct includes failure to pay subscription, fees, charges towards dispute resolution mechanism or other dues.

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

Old Provision: Board or Managing Director or other authorized persons/committees may annul trades or reset prices.

Amended Provision: Persons/committees authorized by the Board (without specific mention of Board or Managing Director) may annul trades or reset prices.

Bye-law 5(e) - Chapter VII: Review Mechanism

Note: The circular text is truncated and does not provide complete details of amendments to this bye-law regarding Independent Oversight Committee review process.

Compliance Requirements

For BSE Members:

  • Comply with updated terminology in all dispute resolution proceedings
  • Ensure timely payment of charges towards dispute resolution mechanism (previously termed arbitration charges)
  • Submit to and abide by decisions of arbitral tribunals and dispute resolution mechanisms
  • Adhere to awards, decisions, and orders made under the amended Rules, Bye-laws and Regulations

For Exchange Operations:

  • Authorized persons/committees must exercise trade annulment and price resetting powers in accordance with SEBI and Exchange regulations/circulars
  • Maintain standards for investor protection, market integrity, and price discovery mechanism
  • Ensure proper authorization framework as per Board delegation

Important Dates

  • Effective Date: November 20, 2025 (date of circular issuance)
  • Applicability: Immediate for all members and exchange operations

Impact Assessment

Operational Impact:

  • Low to Medium: The amendments are primarily terminological and procedural in nature
  • Members need to update internal policies and procedures to reflect new terminology
  • Existing dispute resolution processes continue with updated nomenclature

Governance Impact:

  • Medium: Clarification of authorization for trade annulment decisions streamlines governance structure
  • Removes ambiguity about whether Board/Managing Director must personally approve versus delegated authority
  • Maintains oversight through Independent Oversight Committee review mechanism

Market Impact:

  • Low: No material change to trading operations or market structure
  • Trade annulment and price resetting criteria remain unchanged
  • Continues to protect investor interests and market integrity

Compliance Impact:

  • Medium: Members must update documentation, policies, and internal references
  • Training may be required for compliance teams on updated terminology
  • Fee payment obligations substantively unchanged but terminology updated

Impact Justification

Procedural amendments updating terminology from arbitration to dispute resolution mechanism and clarifying governance authority for trade annulment decisions. Affects member obligations and oversight processes but does not materially change trading operations.