How do I complain about a mutual fund or demat account service deficiency?

Question

My mutual fund redemption has been delayed for weeks and my broker is not responding about wrong entries in my demat account. I want to know where to complain. I would rather settle this without going to court if the law allows it, but I need to know my rights before I sign anything. Please tell me what to do first and what document to keep.

MyVakeel Legal Desk · Accepted Answer

Under Indian law, SEBI (Mutual Funds) Regulations 1996, Regulation 77 is the starting point for this consumer law question. What follows is the position in substance, together with the steps that usually make the difference in practice.

SEBI circulars issued under the Mutual Funds Regulations 1996 require redemption proceeds to be credited to the investor within a fixed number of working days, and delay beyond this attracts penal interest payable by the asset management company to the investor.

Depository participants and brokers must maintain accurate records of holdings under the SEBI (Depositories and Participants) Regulations, and unauthorised debits or wrong entries in a demat account are a serious compliance lapse the participant must rectify on complaint.

SEBI's SCORES portal (SEBI Complaints Redress System) is the mandatory first online forum for investors to lodge complaints against listed companies, brokers, mutual funds and depository participants, with a defined resolution timeline monitored by SEBI under Section 11 of the SEBI Act 1992.

A financial intermediary's failure to execute instructions correctly or to redress a grievance within the SCORES timeline is also a deficiency in service under Section 2(11) of the Consumer Protection Act 2019, allowing a parallel consumer complaint for compensation.

Investors can additionally invoke the Online Dispute Resolution mechanism mandated by SEBI for market intermediaries, which uses institutional mediation and arbitration before escalation to SEBI itself.

In practice, in this order: 1) Raise a written complaint with the mutual fund's registrar or your broker and note the ticket number; 2) File the complaint on the SEBI SCORES portal if not resolved within the intermediary's internal timeline; 3) Use the SEBI Online Dispute Resolution portal for mediation or arbitration if SCORES resolution is unsatisfactory; 4) File a consumer complaint claiming financial loss, penal interest and compensation for continuing deficiency.

Timing matters here: SEBI (Mutual Funds) Regulations 1996, Regulation 77 works on limitation periods, so a sebi scores complaint claim that is right on the merits can still fail if it is brought late. You can post the details on the MyVakeel forum for a practising advocate to review, or book a paid consultation with a Bar Council verified lawyer in consumer law.