Delhi High court brings NSE under RTI Act, calls it a 'public authority'

The Delhi High Court on Wednesday ruled that the National Stock Exchange (NSE) is a "public authority" under the Right to Information (RTI) Act. The judgment means India's largest stock exchange will now come under the country's transparency law.

A Division Bench of Justices C Hari Shankar and Om Prakash Shukla dismissed the NSE's appeal and upheld a 2010 judgment by then Delhi High Court judge Sanjiv Khanna, according to Bar and Bench.

In his 2010 judgment, Justice Khanna ruled that although the NSE was incorporated as a private company under the Companies Act, it performs public functions because it is recognised as a stock exchange under the Securities Contracts (Regulation) Act, 1956.

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The judgment also said that the recognition granted by the Central government, later delegated to the Securities and Exchange Board of India (SEBI), made the NSE an institution of self-government under Section 2(h) of the RTI Act.

Justice Khanna had also held that the NSE is a body controlled by the Central government.

What was the NSE's argument?

The NSE argued that it is a private company because it was incorporated under the Companies Act, 1956, and therefore cannot be treated as a government body or a public authority under the RTI Act.

Bar and Bench also reported that the Division Bench had stayed the 2010 judgment on May 4, 2010, while hearing the appeal.

What happens now?

With the latest judgment, the High Court has upheld the 2010 ruling and dismissed the NSE's appeal.

As a result, the NSE will now be covered by the RTI Act. Citizens can seek information from the exchange through RTI applications, subject to the exemptions provided under the law.

What is the NSE?

The National Stock Exchange (NSE) is India's largest stock exchange. It was established in 1992 and began electronic trading in 1994. Based in Mumbai, it provides a platform for trading in shares, derivatives, bonds, currencies, exchange-traded funds (ETFs) and mutual funds. The NSE is regulated by the Securities and Exchange Board of India (SEBI) and is one of the world's largest stock exchanges by trading volume.