RTI Act to keep stock exchanges on high alert

The Central Information Commission's decision to bring stock exchanges within the purview of Right to Information Act will keep the bourses on high alert and ensure that necessary information is made available to public in cases of manipulation by operators, feel experts.

"The RTI Act will ensure that stock exchanges reveal information to investors on suspected cases of manipulation," investment consultant Prime Database's Managing Director Prithvi Haldea told PTI.

However, he decision of the CIC would not cut much ice as enough transparency is available in working of the stock exchanges since their corporatisation, he added.

"The stock exchanges are no more fiefdoms of brokers and manipulators," Haldea said, adding they are monitored by market regulator Securities and Exchange Board of India on a daily basis.

The CIC order, said Diljeet Titus, senior partner of the corporate law firm Titus and Co, "will keep stock exchanges on high alert and ensure that they remain vigilant and transparent."

The decision, he added, would open yet another window for investors to seek information from the stock exchanges and pursue legitimate interests.

In an era of transparency when bulk of the commercial information is available in public domain, Titus said, "it will not be in the public interest to hide or withhold information."

The CIC in its recent order, overruling the objections of the finance ministry and National Stock Exchange, held that bourses being 'quasi-governmental

body' are public authorities and hence would come within the purview of the Right to Information Act.

Pursuant to CIC's order of June 7, the NSE and Jaipur Stock Exchange would set up an RTI framework within one
month, while the other bourses have been told to comply with the order within three months.

The CIC gave its ruling in respect to two applications filed by investors against NSE and JSE after their refusal to
part with certain information on grounds that they were not covered by the RTI Act.

Commenting on the CIC order, partner of law firm Jyoti Sagar Associates Somasekhar Sundaresan said, "it will open
doors to harassment of stock exchanges by operators and manipulators whose actions the exchanges may seek to curb."

It was not right on the part of CIC to extend the ambit of the RTI Act to cover stock exchanges, he said.

The investment banking technology head of financial consultant Enam Securities, NGN Puranik, however, said the
CIC's decision would bring in more transparency in the working of the stock exchanges and would be good for the capital markets.

This decision, he added, would prompt the stock exchanges to improve the system of surveillance and remain alert, he
added.