The violations of fiduciary and regulatory duties can be a basis for a consumer complaint, particularly when those violations lead to a deficiency in service or unfair trade practices. If a service provider's breach of their fiduciary or regulatory obligations results in harm or loss to the consumer, it can be considered a "deficiency of service" under the Consumer Protection Act. You may proceed with your complaint against the service provider besides keeping an option to recover the financial losses through civil court if you have substantial evidences to prove that there was a loss caused by them to recover the losses.
Need legal help in Pune – stock market complaint Pune consumer forum
The matter involves unauthorized liquidation of securities held in my Margin Trading Facility (MTF) account by a SEBI-registered financial service provider. the service provider unilaterally liquidated my securities, citing a margin shortfall. However, no verifiable margin call was issued via SMS, email, or other traceable mode, as required under SEBI Circular CIR/MRD/DP/54/2017. I was not granted the mandatory T+1 day window to rectify the margin shortfall. Despite repeated written requests, the provider failed to furnish any proof of such communication. The liquidation appears to have been carried out arbitrarily, based solely on internal Risk Management System (RMS) triggers, which cannot override SEBI’s regulatory framework. I have prepared the complaint under the Consumer Protection Act, 2019, on grounds of: Deficiency in service Unfair trade practice Violation of fiduciary and regulatory duties
Asked 6 months ago in Consumer Law
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7 Answers
You can prove the same and seek refund
You can engage local lawyer to file complaint
you can also complain to SEBI against service provider
1. Check whether any SEBI appointed Arbitration tribunal is in place for not for resolution of this kind of dispute.
2. In any case you can very well file case before the consumer forum and seek your remedies.
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File Complaint with Consumer Forum in Pune: You can file your complaint under the Consumer Protection Act, 2019, for deficiency in service, unfair trade practices, and violation of fiduciary duties. Ensure that all your evidence (emails, written requests, SEBI circular, etc.) is properly documented.
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SEBI Complaint: Simultaneously, file a complaint with SEBI through their online complaint redressal system, highlighting the violation of SEBI’s regulatory guidelines.
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Consumer Forum: Provide details of the unauthorized liquidation, lack of communication, and the absence of the mandatory T+1 window to rectify the shortfall. The forum will address the unfair treatment and ensure that the financial service provider is held accountable.
Dear Sir,
You may file the complaint to SEBI as well as complaint with DCDRF in the this regard.
You may pursue strong legal remedies against the SEBI-registered financial service provider for unauthorized liquidation of your securities held under the Margin Trading Facility (MTF). The provider acted in violation of SEBI Circular CIR/MRD/DP/54/2017 by failing to issue any verifiable margin call through SMS, email, or other traceable modes before liquidating your holdings. SEBI mandates that brokers must issue a margin call and provide at least a T+1 working day window to enable clients to meet the shortfall before taking liquidation action. The provider’s unilateral action without compliance with this mandatory process amounts to a clear violation of regulatory obligations.
You have the right to file a complaint under the Consumer Protection Act, 2019, since the service provided was deficient and the conduct amounts to an unfair trade practice. The financial service provider, by failing to adhere to SEBI norms and ignoring your repeated written requests for proof of margin call, breached its fiduciary duties and regulatory obligations. The reliance on internal Risk Management System (RMS) triggers does not override SEBI’s regulatory framework and cannot be used to justify such liquidation.
You may file a formal consumer complaint before the appropriate Consumer Disputes Redressal Commission depending on your claim amount (District Commission for claims up to ₹50 lakh, State Commission for claims up to ₹2 crore, or National Commission above ₹2 crore). You should seek compensation for the financial loss suffered due to unauthorized liquidation, interest on the lost value, and damages for mental harassment.
Additionally, you may consider filing a complaint with SEBI’s SCORES platform for regulatory violations. SEBI may take enforcement action including penalties and directions for restitution, depending on the facts and evidence.
You should collect and preserve all account statements, contract notes, trade logs, screenshots, and email communications with the provider. This documentation will be essential to prove that no traceable margin call was issued and that you suffered financial harm as a result.
If needed, I can assist in drafting the consumer complaint, legal notice to the provider, or regulatory representation before SEBI.
In case you need my assistance in the matter I can be contacted on
Regards,
YUGANSHU SHARMA
SYS LAW OFFICES
