In a significant ruling, the Delhi High Court recently declared the National Stock Exchange (NSE) a 'public authority' under the Right to Information (RTI) Act. This judgment means India's largest stock exchange will now be subject to the country's transparency law, enabling citizens to request information through RTI applications, albeit subject to legal exemptions.
Upholding a Decade-Old Decision
A Division Bench of Justices C Hari Shankar and Om Prakash Shukla dismissed an appeal filed by the NSE, thereby upholding a 2010 judgment by then Delhi High Court judge Sanjiv Khanna. Justice Khanna's original ruling asserted that despite being incorporated as a private company under the Companies Act, the NSE performs crucial public functions.
The court highlighted that the NSE's recognition as a stock exchange under the Securities Contracts (Regulation) Act, 1956, and its regulation by the Securities and Exchange Board of India (SEBI) — through powers delegated by the Central government — qualifies it as an institution of self-government under Section 2(h) of the RTI Act. The 2010 judgment had also concluded that the NSE is a body controlled by the Central government.
NSE's Arguments and Implications
The National Stock Exchange had argued that its incorporation under the Companies Act, 1956, made it a private entity, thus exempting it from being classified as a government body or a public authority under the RTI Act.
With the High Court's latest decision, the 2010 ruling is now firmly in place. This outcome signifies enhanced transparency for India's financial markets, as the public gains a statutory right to access information from the NSE, provided it falls outside the scope of legally protected exemptions.
About the National Stock Exchange
Established in 1992 and commencing electronic trading in 1994, the National Stock Exchange is headquartered in Mumbai. It serves as a vital platform for trading various financial instruments, including shares, derivatives, bonds, currencies, exchange-traded funds (ETFs), and mutual funds. Regulated by SEBI, the NSE is recognized globally as one of the world's largest stock exchanges by trading volume.