- The Delhi High Court ruled NSE is a public authority under the RTI Act.
- The court dismissed NSE’s appeal against a 2010 ruling including it under RTI.
- NSE’s government recognition and oversight define it as a public authority.
The Delhi High Court has ruled that the National Stock Exchange is a "public authority" under the Right to Information Act, despite opposition by India's largest stock exchange, potentially widening public access to information about one of the country's most critical market institutions.
A division bench of Justices C. Hari Shankar and Om Prakash Shukla on July 1 dismissed NSE's appeal against a 2010 single-judge ruling that had brought the exchange within the ambit of the RTI Act. The court held that NSE's role in the financial system, coupled with the extent of government and regulatory oversight, places it within the law's definition of a public authority.
The judgment comes at a time when NSE remains one of the most closely watched unlisted financial institutions in India, with investors awaiting progress on its much-anticipated public listing.
NSE had argued that it is a company incorporated under the Companies Act, receives no government funding and is merely regulated by the Securities and Exchange Board of India. The exchange contended that regulatory supervision should not be equated with government control and warned that such an interpretation could potentially draw banks, insurers, mutual funds, depositories and other regulated entities into the RTI framework.
Rejecting those contentions, the court said, "It is a case where, without recognition by the SEBI, the NSE could not function as a stock exchange at all. "The very identity of the stock exchange as a stock exchange is, therefore, conditional upon recognition," the bench said.
The judges also endorsed earlier judicial findings that stock exchanges operate under "deep and pervasive" government control. The judgment cited powers exercised by the government and SEBI over recognition of exchanges, approval of rules and bylaws, inspections, governance matters, suspension of business and even supersession of governing bodies.
In a key finding, the court said NSE satisfies two separate tests under Section 2(h) of the RTI Act. First, it is subject to deep governmental control. Second, its ability to operate as a stock exchange flows from statutory recognition granted under powers delegated by the Central Government.
"We agree with the learned Single Judge that the stock exchange has to be regarded as having been 'established' or, at the very least, 'constituted' by an order issued by the Government," the court said.
For market participants, the ruling is unlikely to affect NSE's operations or financial performance directly, experts say. However, it could materially increase transparency expectations around the exchange by creating an additional route for investors, activists and journalists to seek information, subject to the exemptions available under the RTI Act.
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