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Thread: SEBI and FII data; question regarding what to post on this site relating to frustrating RTI experience.

  1. #9

    CIC asks SEBI to consider plea on FIIs


    CIC asks SEBI to consider plea on FIIs
    As Reported in Business Standard Online, June 06, 2008
    Press Trust of India / New Delhi

    The Central Information Commission (CIC) has asked market regulator SEBI to decide whether information pertaining to investments made by Foreign Institutional Investors in the country can be disclosed under the RTI Act.

    The apex transparency panel also asked the market watchdog to decide the matter within two months after holding consultations with the government officials as well, besides taking a view point of FIIs in this regard.
    "SEBI can examine the matter closely in terms of extant practices, consult all or a section of stake-holders, examine international practices, and obtain views of top functionaries in the field and in government before formulating response in the matter," Information Commissioner A N Tiwari said.

    The Commission's directions came on an appeal of Abhishek Chowdhury against the decision of the Securities and Exchange Board of India (SEBI) denying information on the yearly net investment figures in March 2005, 2006 and 2007 by each FII.

    Following a hearing on the matter, the Commission noted that SEBI had not examined the issue in details with due consultation with other parties.

    "It is also not clear whether SEBI has examined the practices prevalent in other countries about disclosing such information about FIIs," Tiwari said, adding, "nothing had been stated as to how disclosure of this information would be injurious to the economy of India."

    The SEBI also failed to respond to a query by the CIC on whether such information was regularly provided to the Government, Reserve Bank of India and Foreign Investment Promotion Board (FIPB).



    CIC asks SEBI to consider plea on FIIs



  2. #10

    Re: CIC asks SEBI to consider plea on FIIs


    Thank you very much for this update. I am an academic with an RTI request to SEBI regarding FII data -- different from this request in only small details. My request was heard by the CIC, remanded to SEBI, rejected there, and will be heard again now at some point by CIC.

    I wish I had been able to share notes with this appellant. In my case all of SEBI's objections u/s8 were rejected by CIC, and stated that way explicitly in its ruling. I had made clear I was seeking only stale archival historical data (not real-time data of possibly commercial value) and that I did not want any personal-identity information. SEBI's strategy had simply been to obliterate the distinction between stale and real-time data, pretend I was asking for personal details, etc ... and in general write a response that seemed to have very little relationship to my request.

    But at the CIC hearing SEBI claimed that they did not have the data with them -- it turns out now that they DO -- and used that to avoid or delay giving the data.

    This new CIC ruling that you have noted below raises an important general question of principle, and one that is going to be very critical in a lot of academic requests for data. Once regulatory bodies (like SEBI or RBI) obtain compliance data from the primary data providers (e.g. authorized dealers or whoever else is a "custodian" for FII transactions) isn't that data "owned" by the PA (and consequently by the People of India) and so should be available under the RTI, subject only to exceptions valid u/s8?

    If the answer is yes, why should the PA then have to go back and consult the thousands of custodians? As long as it protects the personal identity information of FIIs there should be no bar. At least one custodian (in a major bank) who I have spoken to agrees that the data belongs to SEBI, and it can do whatever it wants that is legal. (I don't know if he is a lawyer.)

    If the answer is no, it provides another elephant-size loophole for PAs to escape through. If the PhD student who sought NREGS information from the Ministry of Rural Development (and finally got it) was told instead that the Ministry had to consult all of the districts and other entities that provided the raw data, she would never have got the data in this lifetime. In that instance the CIC did NOT take this view. So for the CIC to now possibly be on the threshold of dangling this loophole for PAs to seize is a little disturbing.

    I am not a lawyer. I wonder if there is a lawyer on this forum who can throw light on case-law that can help us decide if the compliance data that PAs obtain "belong" to it or not. The CIC consists as far as I can tell of fairly decent people, but the case overload means they cannot go even a millimeter outside the written record immediately before them. The RTI Act confers some discovery powers on the CIC but they don't have the resources for that provision to be meaningful. So whatever case-law and prior rulings we can muster can be critical. Dear lawyer-members, please help. Thank you. Best,

    Murgie

    Quote Originally Posted by sidmis View Post
    CIC asks SEBI to consider plea on FIIs
    As Reported in Business Standard Online, June 06, 2008
    Press Trust of India / New Delhi

    The Central Information Commission (CIC) has asked market regulator SEBI to decide whether information pertaining to investments made by Foreign Institutional Investors in the country can be disclosed under the RTI Act.

    The apex transparency panel also asked the market watchdog to decide the matter within two months after holding consultations with the government officials as well, besides taking a view point of FIIs in this regard.
    "SEBI can examine the matter closely in terms of extant practices, consult all or a section of stake-holders, examine international practices, and obtain views of top functionaries in the field and in government before formulating response in the matter," Information Commissioner A N Tiwari said.

    The Commission's directions came on an appeal of Abhishek Chowdhury against the decision of the Securities and Exchange Board of India (SEBI) denying information on the yearly net investment figures in March 2005, 2006 and 2007 by each FII.

    Following a hearing on the matter, the Commission noted that SEBI had not examined the issue in details with due consultation with other parties.

    "It is also not clear whether SEBI has examined the practices prevalent in other countries about disclosing such information about FIIs," Tiwari said, adding, "nothing had been stated as to how disclosure of this information would be injurious to the economy of India."

    The SEBI also failed to respond to a query by the CIC on whether such information was regularly provided to the Government, Reserve Bank of India and Foreign Investment Promotion Board (FIPB).



    CIC asks SEBI to consider plea on FIIs

  3. #11

    Re: SEBI and FII data; question regarding what to post on this site relating to frustrating RTI experience.


    As can be observed from this case the CIC dithered in delivering a clear cut direction to the Public Authority. Leaving it to the PA(in this case the SEBI) to decide on this issue has left SEBI with a greater leeway than before.

    This very same PA after some time shall come back to CIC and repeat the same old story of denial.

    This also shows the lack understanding on part of the ICs to take decisions on such issues.

    This issue should have been decided within the narrow confines of RTI without getting hypertechnical, i.e. whether disclosoure of this information is in larger public interest or not ?


    Sidharth
    Last edited by sidmis; 07-06-08 at 07:47 AM.

  4. #12
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    C J Karira
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    Re: SEBI and FII data; question regarding what to post on this site relating to frustrating RTI experience.



    Basically there are 3 main issues here:

    As postulated by murgie:

    1. The FII's and other entities have to mandatorily (by law) report certain data to SEBI. Once the data is mandatorily submitted, SEBI becomes the "custodian" of the information. Sec 2(f) read alongwith Sec 2(i) and 2(j) makes the custodian of such information liable to disclose it unless it falls under Sec 8.

    2. Under various parts of Section 18 and Sec 19(8)(a)(i) it is obligatory on the part of the CIC to either order disclosure of information to the appellant or uphold the decision of the PIO/AA not to disclose. As Sidharth says, CIC is just "passing the buck" back to the PA (SEBI) and this is not the first time it is doing so in a inconvenient matter. The buck stops at the CIC/SIC.

    3. Asking SEBI to reconsider the whole issue is like a judge telling the accused to go back and think again whether he really committed the crime !

    The only saving grace I can see is that there is a mention of SEBI to find out practices in other countries. If murgie and this particular appellant can identify those regulators in other countries who routinely divulge such data (with or without using RTI), SEBI will not have much choice after 3 months.

  5. #13

    Re: SEBI and FII data; question regarding what to post on this site relating to frustrating RTI experience.


    Responding to the last 2 posts by Karira and Sidmis:

    1. In my CIC hearing on this matter, the CIC explicitly and rather quickly cut the SEBI rep and made him acknowledge that objections u/s8 were meaningless. I was rather impressed by that, especially since this IC (Shri Tiwari) and the SEBI CPIO (Shri RK Nair) must be seeing each other very often each month. It built up my confidence. The IC even stated this in his ruling. I regret not having had any opportunity to coordinate with the other appellant, who could have used this to his advantage. (The CIC does seem to lack any built-in institutional memory of its own rulings.)

    2. While the CIC has some authority he does not have the power to simply bang the head of the SEBI PIO and force him to give. What the SEBI CPIO asserted in my CIC hearing was that SEBI simply simply DID NOT HAVE THE DATA WITH IT, but had to get it from the various custodial institutions. This has turned out to be simply FALSE, with one major custodian explaining to me all of their regular compliance filings, which included everything that I was asking for.

    3. This business about 'check the practices in other countries' would be amusing but for the fact that in every submission I have pointed out that not just elsewhere but even here in in India the National Stock Exchange provides very detailed data from the data that it has (even providing identity information MASKED, so the data is useful for researchers without violating privacy). If SEBI's arguments were valid, the NSE, which SEBI regulates, should have been prohibited from releasing the historical data that it does. Yet SEBI has never bothered to acknowledge anything. And this suggests that the IC has also not read the documents before him very carefully. (Some of these documents are posted in one of the initial messages I posted on this thread many months ago. Another agency that has FII data, RBI, has never relied on any of SEBI's arguments, but their computer problems, many of which they acknowledged in gory detail before the CIC, seem more serious. And they've been willing to consider some alternatives.)

    4. All said and done -- I am not as pessimistic. But I wish there was a way to reach this other appellant, so he could benefit from my experience and I could benefit from his. In particular he needs to understand that by asking for an "annual aggregate" he is demanding that SEBI "process" the data which it will resist and the CIC is willing to go along with (even if the processing is TRIVIAL). It is probably easier to seek the data exactly as it exists with SEBI, which is transaction-level data. To resolve the problem of some identity-information being part of the transaction records SEBI could MASK the data (which is partly in dBase, partly in Oracle, and so requires only the use of a "translate/replace" function, which 4 different database professionals have assured me is a strictly trivial operation, and are willing to give me their signed opinions on this matter. Even if the records are in millions, this will take at most minutes, if not seconds).

    5. If the other appellant is in fact interested in FII identity information as well, then the argument that public-interest outweighs any concern for privacy will have to be made. This is clearly a position that many will take but we are probably biased. It is here that your criticism that the CIC needs to show a little more spine is valid.

    5. SEBI's naked lying is what has bothered me the most. Can't the CIC be made to see clear malafide in that?

    6. At this point we could also do with the help of some journalist interested in RTI and willing to work enough to independently verify this story. There are several issues of wider public significance involved:
    (a) when the world talks of moving towards more transparent financial markets, is it appropriate for India's primary financial regulator to be explicitly dedicated to fighting off any transparency. (The language SEBI has used in its responses would be hilarious in any b-school finance course.)
    (b) can the regulator be allowed to get away with blatant lying before the CIC?
    (c) Who owns "compliance data" filed with a PA?

    Best,
    Murgie

  6. #14

    Re: SEBI and FII data; question regarding what to post on this site relating to frustrating RTI experience.


    Hello Murgie,

    You can find the address of Sri ABHISHEK CHAUDHARY using the Central Information Commission - Action Status page. But be careful about the spelling though. The order mis-spells his name a little bit. This time a concerted and co-ordinate effort from both of you may force SEBI to part with this information to the Public.


    SEBI's naked lying is what has bothered me the most. Can't the CIC be made to see clear malafide in that?
    It's amusing that you have given a very positive feed back on your experience at CIC even though you have expressed that CIC has failed to see through the blatant lies of SEBI.

  7. #15

    Re: SEBI and FII data; question regarding what to post on this site relating to frustrating RTI experience.


    Neither the IC nor I realized that the SEBI CPIO was lying at the CIC hearing on April 21, 2008. It is only SINCE then that I learnt that the SEBI CPIO was lying. The "de novo" hearing by SEBI'a AA was a FARCE (2 minutes on audio, though video had been arranged well in advance in cooperation with SEBI's IT people, no opportunity for me to hear the SEBI CPIO, let alone question him). The concern I expressed was with SEBI lying happily without a care in the world. (The exact date of the Abhishek Chowdhury hearing is also not clear, so am not sure now if it was before or after my hearing.)

    Remanding to SEBI's AA by the CIC in so many cases is unfortunate -- there is clearly not a trace of independence, competence or integrity in the SEBI AA's office, per the cold documentary evidence in cases I have followed closely, even with the change in SEBI AA. Best,

    Murgie

  8. #16
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    Name:
    C J Karira
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    Re: SEBI and FII data; question regarding what to post on this site relating to frustrating RTI experience.


    murgie,

    I just read the CIC orders on SEBI once again and there is a major discrepancy:

    In your case, SEBI said that the data was not available with them.

    In this case, SEBI denied disclosure under Sec 8(1)(a), 8(1)(d) and 8(1)(g) !

    Further, the CIC order specifically mentions:
    "However, the respondents during the hearing were not able to produce before the Commission any decision of the SEBI, in its capacity as a Capital Market Regulator, that the information as requested by the appellant should not be disclosed."

    So which version of SEBI (in front of CIC) is correct ? Does SEBI have the data or not ?

    Secondly, in your case , "third party" clause or interest was neither highlighted by SEBI nor by the CIC. Did it come up during your hearing ? If not, then how come "third party" has appeared in this case ?

    Thirdly, can you, as a seeker of similar information from SEBI, implead yourself as "third party" in this case, which has been remanded back to the AA ? As per Sec 2(n):

    n) "third party" means a person other than the citizen making a request for information and includes a public authority.

    Lastly, try to find a precedent where similar data (either in part or full) was disclosed to Parliament in the past. If it was disclosed, then invoke "Provided that the information which cannot be denied to the Parliament or a State Legislature shall not be denied to any person."

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