Re: SEBI and FII data; question regarding what to post on this site relating to frustrating RTI experience.
Originally Posted by karira
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 ?
SEBI has the data. To eliminate any ambiguity on this score, and to give everyone some appreciation about how brazen SEBI can be, I am attaching a copy of the Reporting Guidelines for FII Transactions that custodians (such as banks) who have to file reports with SEBI, on a daily or monthly basis, must comply with.
The most detailed data in this is the FII Daily Transaction Report. Everything else is built up from this. This report does contain FII identity information, which the official from the custodial bank who gave me this information told me needs to be protected but does not prohibit masking (which NSE uses for similar very detailed data that it makes available based on stock quotes and trades on NSE). All custodial institutions are required to file with SEBI in electronic form (besides hard copy) and this used to be in dBase format, later in Oracle format.
NSE, at least as yet, does not tell us if a trader is an FII. By getting the data from SEBI, we'd know a trade is FII-generated. Beyond that there is no additional detail in the FII Daily Transaction report that NSE does not already make available at nominal cost for research (albeit after some delay, usually about 6 weeks).
SEBI invoking s8 is a mechanical gambit that it has been doing all the time, regardless of that being even remotely relevant.
Originally Posted by karira
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.
By third party SEBI is merely referring to the custodial institutions like banks that submit the compliance data to it. This was what made me raise the general question (also noted in a separate thread seeking lawyer-members' responses): shouldn't this data be regarded as being "owned" by SEBI, and not by the numerous custodians, and so be subject to disclosure under RTI except for exemptions u/s8?
Originally Posted by karira
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."
Is there some way of searching remotely thru Parliamentary archives? Else, despite our world being so wicked can one hope to find an MP who will stand up for what is right? Suggestions welcome. Best,
This is the website that has a data base for all questions raised in Parliament:
The Rajya Sabha part does not open at all.
The Lok Sabha data is for the XIII and XIV Lok Sabha's only.
The above website is heavily infected with malware and trojans. My antivirus gave me a warning every second during the 20 seconds I was on the website.
All trojans / malware on that website are of Chinese origin because the have the word "nihao" in them.
Just be careful.
The following websites also have the question bank and don't seem to be infected (my anti-virus did not show up anything suspicious):
But the above sites have the data only for the current Lok Sabha (XIV) and Rajya Sabha.
Have begun looking at this. Will take some time to exhaust this, but this is a very interesting and potentially very valuable link for many.
So far I've only been looking at Finance Ministry Rajya Sabha questions. And was intrigued by one question -- Question #1161 on page 24, where the questioning MP explicitly asks for identity information (names of defaulters associated with major non-performing assets of banks). He is not denied the information but is told the the major defaulters are listed at a different website. If you go to that website, it is not clear that the answer to that is in fact there ... though I must admit that there is quite some stuff that would be "close" to the answer.
So at least for those members seeking information about major bank defaulters, I think they can make a much stronger case even if they seek identity information, if they use this Parliamentary question precedent. Best,
Participatory notes: Transparency lacking
The best capital markets in the world are characterised by transparency. The US treasury secretary used this characteristic of his country’s capital market as one of the USPs during his recent Gulf visit. I wish our stock exchanges realised it..
HOLDERS OF participatory notes or P-notes are in the news again for all the wrong reasons. The AIADMK boss Jayalalithaa is perfectly in order in demanding that the finance ministry publish on SEBI’s website, a list of all P-note holders as also the amount invested by the said holders. If, as the union finance minister P Chidambaram claimed, all information concerning FIIs and the P-notes issued by them were available with SEBI why did SEBI remain a mute spectator when it found out that the stock market had been manipulated, wondered the Poes Garden, Chennai, resident. In the light of the bitter experience, she demanded to know whether the finance ministry had initiated measures to ensure that SEBI was adequately armed to deal with such crises in future. What measures had the ministry initiated to ensure that narco-terrorist money did not find its way into the country’s stock market should also be disclosed.
She recalled that the National Security Advisor MK Narayanan had cited instances of terrorist outfits manipulating stock markets to raise funds for their operations. The stock exchanges in Mumbai and Chennai reporting fictitious or notional companies engaged in trading only confirmed Narayanan’s worst fears. She challenged Chidambaram to reveal the names of all foreign investors who sold stocks aggregating Rs 18,600 crores on January 23 and 24. Their action led to an unprecedented fall of the stock market and inflicted heavy losses on Indian investors.
Is the Madam’s contention right? Yes. The best capital markets in the world are characterised by transparency. In fact, the US treasury secretary used this characteristic of his country’s capital market as one of the USPs during his recent Gulf visit. Investors deserve access to details from FIIs on inflow of funds. This will help them find out how much a registered FII has invested or holds in the country. This will also help the investors in gauging the investment climate obtaining in the country at a given point of time as accurately as possible. The Central Information Commission (CIC) should therefore be thanked for asking the market regulator SEBI to explore the possibility of revealing the investments made by individual FIIs under the provisions of the Right to Information Act (RTI). Jayalalithaa is perfectly right in claiming that investment details concerning individual FIIs are not in the pubic domain. Presently SEBI places on its website only consolidated monthly data on FIIs, although it is (hopefully) in possession of FII-wise data. The finance ministry too (hopefully, again) is in possession of FII-wise data.
The fact that SEBI has refused to part with information on yearly net investment made by individual FIIs during the years 2005, 2006 and 2007 has only made things worse by arousing suspicion. Instead, it could have said that it would furnish the information after consulting the other stakeholders, viz., the finance ministry, RBI and the FIIs themselves in the matter, if this really was the reason behind the refusal. Now that the CIC has stepped in, SEBI has no alternative but to take a call on the issue within two months.
SEBI apparently refused to part with the information on grounds that it would harm the country’s economic interests. It made use of the exemption clause provided in the RTI Act, 2005. It did not elicit the views of the individual FIIs on the advisability of parting with the said information because there were too many FIIs around! There is a provision in the Act which mandates that the parties affected by the decision (to part with the information), technically called third parties, which in this case happen to be the FIIs, should be heard. The law does not provide that if the said third parties are too many in number, they need not be heard. Even more unbelievably, SEBI is not sure whether the information sought was centrally available or was furnished regularly to the government, RBI and the Foreign Investment Promotion Board! I wonder why the RBI did not follow it up if SEBI did not keep it informed periodically of the information. It is worth recalling at this point that the Bombay Stock Exchange and the National Stock Exchange have moved the courts against being brought under the purview of the RTI Act. And Mumbai aspires to become an international financial hub…!
Thanks, Karira-ji, for the last post of the Shivakumar article. The actual language that SEBI has used (in its RTI responses, and in several of the parliamentary answers that I am sure emanated from SEBI) is amazing. And a phrase less emotional than transparency but so commonly used in connection with financial markets, has NOT been used. Even someone with one undergrad finance course (not to mention many even without that) would have read of the "informational efficiency of financial markets" as a desirable goal. SEBI is one regulator who has virtually dedicated itself to NOT having an informationally efficient market.
Some of the parliamentary questions (this cuts across ALL parties) have been poorly posed. E.g. "Give details" without specifying "give details including at least variables X, Y, Z." So the answers provide next to nothing, that the Hon MP could have obtained for himself faster by hiring a high-school research assistant, or even just by learning to use google! What a waste of taxpayer money!
There are about half a dozen examples of better questions that have tried probing and seeking more meaningful details. These have invariably been replied to as "The data is being collected and will be tabled." So it is not clear what was tabled if at all.
The parliamentary queries asking "Have our markets been affected? Is there are a problem?" have all been dismissed simply by stating that "since trading volume is high, there can't be a problem." And when the question pertains to a date or period when there was a market shock, the answer has been to simply provide a summary over a longer period -- 'see, average volume is high' -- and stating that SEBI is empowered to regulate as necessary.:-):-):-)
There is also occasional reference to US markets or practices, and a statement that our markets and practices are in line with those. While US standards are by no means impeccable, in the matter of disclosing detailed market statistics, there is little doubt that our regulator is light-years behind the SEC. Among our exchanges, NSE has shown some willingness to disclose significant chunks of historical data, BSE has stubbornly fought this off, with SEBI's explicit help.
When trading volumes are high even with regular scandals featuring in the financial press, it suggests that the market is INefficient, and driven by noise rather than information. But I can't tell if any MP asked a supplementary challenging the cursory or nonsensical answers often provided. Best,
The folks seeking better disclosure of FII data because of the scandal surrounding the use of Participatory Notes seek identity information (for very good reasons). But most academics including me have been seeking a lot LESS -- we have not asked for identity information. SEBI in its replies has obliterated the distinction between different kinds of requests, and between real-time and stale data, and denied everything. Best, -Murgie
Last edited by Shrawan Pathak; 09-06-08 at 08:28 PM.
CIC asks SEBI to consider plea seeking info on FIIs
AS REPORTED ON ZEE NEWS. COM
New Delhi, June 06: The Central Information Commission 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).
"Commission feels that this is a matter which needs thorough examination in consultation with all stake-holders for determining whether the information is disclosable," Tiwari said.
Noting that there was public interest in disclosing the information, the Commission also asked SEBI to take views of some representatives of FIIs which are over 800 and reverted the matter back to it.
Re: CIC asks SEBI to consider plea seeking info on FIIs
This story has been reported on this site before. I've even tried contacting this Abhishek Chowdhary, without luck so far.
What those following SEBI for FII data need to be aware of is that in its submissions to the CIC, SEBI has tried confounding many different kinds of RTI requests for FII data:
(1) requests seeking FII identity information (with very good reason, as some requests concerned with lack of transparency of investment activity under Participatory Notes do), with requests that do NOT ask for FII identity data (as most academic research requests do)
(2) requests that do NOT seek real-time data (which may have commercial value) with requests that do seek real-time data (I am not aware of ANY request that does).
By adopting a strategy of fudging over the real nature of an RTI data request, SEBI has been pretending that appellants are all seeking FII identity data, possibly even real-time data, and then simply refuses to release ANYthing. CIC rulings have not always shown alertness to the distinction between different types of FII data requests made to SEBI, and SEBI has capitalized on this.
I hope at least future appellants seeking FII data will make an effort to be clearer about what data they are requesting, and what they are NOT, and help sensitize the CIC in this matter. SEBI by itself will never yield anything; it's going to take a lot firmer action by the CIC for that to happen.
The exact format of the various filings that custodians for FII transactions have to make with SEBI are also detailed in a SEBI document, which for reasons best known to itself it does not make public. (This document is now on this site under DIRECTORY, as part of a set of documents relating to a request to SEBI for FII data.) So it forces data seekers to guess a bit in asking for the data, and SEBI tries to hide behind "We do not have the data in the exact format sought ... to put it in that format will cost crores ...." which is pure garbage, given the data is all in a standard dBase or Oracle file. Best,