Is stock exchange a public body?

The Bombay Stock Exchange (BSE) has once again moved the Bombay High Court seeking to avoid sharing “confidential” information with the public.

The bourse had last year moved the HC challenging an earlier order passed by the Central Information Commission (CIC) directing it to furnish information under the Right to Information (RTI) Act. BSE had argued that stock exchanges are not “public authorities”, which are covered by the RTI Act.

While the courts are still to decide whether BSE is covered by the RTI Act, an ex-BSE member ingeniously filed an application with the Securities and Exchange Board of India (Sebi) to get information regarding disbursal of funds by the BSE from the IPF.

The applicant, Yogesh Mehta, made an RTI application to Sebi last September. He stated that the information sought by him regarding disbursal of money under the IPF since 1995 was in the larger public interest. The market regulator then forwarded Mehta’s application to BSE and asked it to provide the relevant information. The BSE replied that it could not entertain Mehta’s application because if Sebi were to obtain information from those it regulates and make it available to a third party, it would effectively extend the provisions of the RTI Act even to those that are not a public authority.

Sebi’s appellate authority ruled against BSE, which then went to the CIC. On May 27, 2009, the CIC order also went against BSE as it directed Sebi to obtain the requisite information from BSE and disclose it to Mehta. Sebi has challenged the May 27 CIC order in the HC.

Sebi has argued that the confidential information that Mehta cannot get directly from BSE cannot be indirectly sought through Sebi. Its petition stated that if a third party is allowed to apply to a public authority for information relating to a private body, over which it exercises regulatory control and expect that public authority to collect that information and provide it to him, then the RTI Act would be turned into a right to harass private organisations. It has also challenged the power of the CIC to direct Sebi to obtain information under the Sebi Act to provide it to a third party.

The HC last week asked CIC, Sebi and Mehta to file their replies. The matter will be heard in September.

To disclose or not
An ex-BSE member ingeniously filed an application with the Sebi to get information regarding disbursal of funds by the BSE from the Investor Protection Fund.

Sebi has argued that the confidential information that Mehta cannot get directly from BSE cannot be indirectly sought through Sebi.