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  1. #17
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    C J Karira
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    Re: Stock Exchanges now under RTI


    As reported by Sucheta Dalal and Sanket Dhanorkar in moneylife.in on 16 April 2010:
    NSE hit by triple whammy in just one week - Moneylife: Personal Finance Magazine

    NSE hit by triple whammy in just one week

    The National Stock Exchange has suffered three reverses in just one week: The Delhi HC verdict that it falls under the RTI Act; the verdict in the case filed by an ex-employee and finally, an order by the Competition Commission about its predatory practices

    The National Stock Exchange (NSE), which projects the image of a government organisation, has been fighting multiple cases. In a sudden reversal of fate, it has suffered three blows in just one week. On Monday came the news that the Competition Commission of India has ordered an investigation into its predatory practices in the currency derivatives segment to kill the upstart competitor MCX Stock Exchange. Then, the Bombay High Court turned down its application to block a case in the lower courts, under which former employee A Sebastin has charged NSE of tarnishing his reputation (see here).

    Finally, NSE’s effort to stay outside the public scrutiny under the Right to Information (RTI) Act has been thwarted. In a significant judgement, the Delhi High Court recently quashed NSE’s appeal against an earlier order by the Central Information Commission (CIC), rightly declaring the stock exchange as a public authority.

    With this order, the stock exchange will now fall under the ambit of the RTI Act. As such, it will be forced to disclose information demanded by the public on various matters, subject to certain exceptions.

    However, the embattled exchange may not take the order lying down and may soon appeal to the apex court, the Supreme Court of India. When Moneylife contacted an NSE official for their future plan of action, we were told that an immediate response would not be available.

    In another similar case, the Bombay Stock Exchange (BSE) has moved the Bombay High Court.

    The NSE has been vehemently fighting against any attempt at putting itself in the public eye, despite claiming to be a company run by ‘professionals’. Its contention is that, being an autonomous body with no government control over it, it cannot be forced to disclose information under the transparency law.

    The exchange’s apprehension over disclosing company information has baffled many RTI activists and lawmakers alike. It is being viewed as desperate attempts on part of the exchange to cover up its various misdeeds.

    The lack of transparency surrounding stock exchanges in the country is not surprising given that none of the exchanges are listed. This itself is highly detrimental to the interests of investors, shareholders and the society at large. Institutions which are at the core of stock-trading activities should be the first in line to bear the consequences of reckless trading and subterfuge of certain market participants.

    The CIC had announced in June 2007 that all registered stock exchanges are public authorities under the RTI Act and therefore these organisations are obliged to give information to any requisitioner under the Act. The CIC had given its decision in response to two appeals filed by the NSE and the Jaipur Stock Exchange.

    The CIC had made it perfectly clear that functioning of all recognised stock exchanges are under the ‘deep and all-pervasive close control’ of the Central government and hence they fall within the definition of ‘public authority’ under the RTI Act. The CIC in its ruling had elaborately enumerated various provisions of the Securities Contract Regulation Act (SCRA) to underscore the control that the government exercises over stock exchanges.

    Yet, the NSE remained adamant and approached the higher judiciary challenging the interpretation pronounced by the CIC and obtained a stay order.

    However, with the Delhi HC upholding the CIC order, the NSE has very few cards left to play. It will no doubt bring out every last trick in its bag to ensure that transparency and disclosures continue to remain outside its domain of ‘professional’ activities.


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    Twitter: @cjkarira

  2. #18
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    Re: Stock Exchanges now under RTI


    Digitally signed Copy of HON'BLE MR. JUSTICE SANJIV KHANNA's judgment on N.S.E. vs. C.I.C. & Others is uploaded along with a direct link.

    Sidharth

    http://bit.ly/dCfJUC
    Attached Files Attached Files
    Last edited by sidmis; 19-04-10 at 02:48 PM.

  3. #19
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    Re: Stock Exchanges now under RTI


    That is an excellent and reasoned judgment.
    Very useful in interpretation of the term "Public Authority" and gives a very wide scope of interpreting various words and phrases used in Sec 2(h).
    Will be helpful to members and guests who are trying to bring in other bodies also under the RTI Act.
    Going by the reasons given by the Hon'ble Judge, it is safe to presume that even BSE and other Stock Exchanges are "Public Authorities" under the RTI Act.

    In fact, reading some of the reasons put forward also make me think that BCCI is also a "Public Authority" as defined under the RTI Act.
    Twitter: @cjkarira

  4. #20
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    C J Karira
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    Re: Stock Exchanges now under RTI



    As reported in moneylife.in on 19 April 2010:
    SEBI's counter affidavit proves NSE as government entity in RTI case - Moneylife: Personal Finance Magazine

    SEBI's counter affidavit proves NSE as government entity in RTI case


    Last week the Delhi High Court, while ruling that the National Stock Exchange (NSE) is bound to reveal information under the Right to Information (RTI) Act, said the Exchange falls under the purview of 'public authority'. Market regulator Securities and Exchange Board of India (SEBI) was found to have played a significant role in the case by filing a counter affidavit.

    The NSE tried to maintain that since it is an autonomous body and not controlled by the government, it cannot be forced to disclose information under the RTI Act.

    However, SEBI's counter affidavit clearly stated that Government of India or Government companies own more than 50% of the shares of NSE. The Exchange then tried to dispute the counter affidavit as 'contention and not factual statement'.
    In the ruling, Justice Sanjiv Khanna said that since the aspect of factual dispute is examined by the Central Information Commissioner (CIC), he was not going into this aspect.

    In 2007, the CIC had held that stock exchanges are quasi-governmental bodies which are bound to disclose information to the public under the RTI Act.

    "It is held that the petitioner is a public authority as it is an authority or institution of self-government constituted or established by notification or order issued by the appropriate Government. It is also held that the petitioner is controlled by the appropriate Government. The writ petition WPC No.4748/2007 accordingly has no merit and is dismissed," the order said.

    While directing the Exchange to put in place a mechanism for providing information under the RTI Act, the High Court said, “A stock exchange being a quasi-governmental body working under the statute and exercising statutory powers has to be held to be a public authority under the Act.

    With this order, the stock exchange will now fall under the ambit of the RTI Act. As such, it will be forced to disclose information demanded by the public on various matters, subject to certain exceptions.

    Justice Khanna, in the ruling, also said that the idea, purpose and objective behind the beneficial legislation is to make information available to citizens in respect of organizations, which take benefit and advantage by utilizing substantial public funds. This ensures that the citizens can ask for and get information and know how public funds are being used, and there is accountability, transparency and openness, the order said.

    However, the embattled exchange may not take the order lying down and may soon appeal to the Supreme Court of India. Earlier, when Moneylife contacted an NSE official for their future plan of action, we were told that an immediate response would not be available.
    Twitter: @cjkarira

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