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Settling disputes in securities sector with the SERC mediation mechanism

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Arbitration offers a quick and less costly method of redressing investor grievances. SUPPLIED

Settling disputes in securities sector with the SERC mediation mechanism

The Securities and Exchange Regulator of Cambodia (SERC) has established the Securities Dispute Resolution Center to address the grievances of market players when disputes arise.

The SERC introduced the dispute settling mechanism to maintain trust and protect market participants – especially public investors.

The SERC – established under the Preah Reach Kram No. NS/RKM/1007/028 on October 19, 2007 that promulgates the Law on the Issuance and Trading of Non-Government Securities – is the sole authority that controls and supervises the securities sector.

The Securities Dispute Resolution Center was set up in line with the Financial Sector Development Strategy 2011-2020, International Organization of Securities Commissions principles and the ASEAN Economic Community Blueprint.

The centre is under the purview of the SERC’s Complaint and Dispute Resolution Division of Legal Affairs Department.

What constitutes a dispute?

A dispute in the securities sector refers to all claims, disputes or controversies involving securities or services in the sector. Disputes can arise between a securities company and a client who is an investor, or an between an issuer and an investor.

Mediation

Mediation is the process of alternative dispute resolution with the participation of a third party – mediator (s) – who is/are official (s) of the SERC appointed by its director-general upon request of the head of division in charge of dispute resolution, to support disputing parties in negotiations and propose options, and encourage and push disputing parties to reach agreement as far as possible.

Disputing parties in the securities sector shall file complaints with the SERC for mediation to be conducted by mediator (s) with confidentiality.

A complaint shall be dismissed if it is not related to the securities sector; if it contains insufficient or improper information; if the plaintiff is incompetent or has no interest; if it is related to a criminal case; if it has been settled or is being settled by an arbitration tribunal or court; or if it has been made when a limitation period of right to sue has expired.

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When a complaint is fully completed and has complied with the requirements as stipulated in the regulations, the disputing parties shall sign a mediation agreement as prescribed by the director-general of the SERC and pay an administration fee and mediator fee, as well as a deposit to cover the costs of other mediation process expenses.

The mediator (s) shall invite the disputing parties to participate in mediation on the date and at the place as set by the mediator (s).

If a disputing party is unable to attend the mediation meeting as scheduled, the mediator (s) shall set a second and subsequent time as is necessary.

If a party is absent from meetings twice consecutively during the mediation process without proper reason, the dispute shall be deemed not settled.

The mediation process shall be concluded within 90 days from the date of the appointment of mediator (s) by the director-general of the SERC.

Mediation may be settled or unsettled. Any agreement by disputing parties reached in the presence of mediator (s) will be effective for execution.

Any unresolved issue of disagreement shall result in mediation being deemed unsettled. The mediator (s) shall then make an unsettled mediation record that states disagreed issue (s), the reasons and other essential relevant information.

Other options if mediation process fails

Disputing parties that cannot reach a settlement in mediation can file a complaint with the SERC, arbitration tribunal or competent court regarding the unsettled issue within 90 days of the date that the disputing parties received the unsettled mediation record, otherwise the right to file the complaint will be lost.

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