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Informist, Friday, Jul. 31, 2026

 

--SC stays order that NSE is public authority under Right to Information Act 

--SC notice to central information body on NSE plea in public authority case 

--CONTEXT: HC had said NSE is public authority under Right to Information Act 

 

NEW DELHI – The Supreme Court Friday stayed the Delhi High Court and Central Information Commission's rulings that the National Stock Exchange of India is a "public authority" under the Right to Information Act, 2005. The apex court issued a notice to the Central Information Commission on NSE's appeal against the high court order. 

 

Solicitor General of India Tushar Mehta, appearing for NSE, said the exchange was not a public authority as it had 40% local investors and 27% foreign investors. The amount of trading that happens on the exchange's platform is very high and if the high court order continues and Right to Information applicants seek information on trading or transactions, the National Stock Exchange will stall, he said. 

 

The high court's order meant that the National Stock Exchange was legally obligated to disclose information sought by an applicant and appoint public information officers under the 2005 Act. In addition, the reasoning in the high court's order might have also extended to other stock exchanges, clearing corporations and depositories operating in India's securities market. 

 

On Jul. 1, the high court's division bench of Justice C. Hari Shankar and Justice Om Prakash Shukla upheld its single judge bench's 2010 ruling that NSE qualified as a public authority under the categories of bodies owned, controlled or substantially financed, directly or indirectly by funds provided by the appropriate government. The division bench said the Supreme Court earlier had already concluded the stock exchanges belonged to the category of "State" under Article 12 of the Indian Constitution.

 

The high court noted that NSE was recognised as a stock exchange under an order issued by the Securities and Exchange Board of India. This resulted in NSE being constituted and established as an "authority" or "institution of self-government", the court noted. "The order issued by the SEBI under Section 4(3) of the SCRA (Securities (Contracts) Regulations Act, 1956), which was essential for NSE to function, had to be regarded as an order issued by the Central Government in view of Section 29 of the SCRA," said the high court.

 

Section 4(3) of the 1956 Act requires recognition of the stock exchange by the government for it to function as a stock exchange, the high court said. "In view of the fact that Section 4(3) requires governmental recognition for a stock exchange to function as such, 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," said the high court. 

 

NSE had argued that it was not owned, controlled or substantially financed, directly or indirectly, by the appropriate government. It was recognised and regulated by the SEBI, as a delegated authority of the central government under the provisions of the 1956 Act and The Securities and Exchange Board of India Act, 1992, said NSE. If regulatory control of stock exchanges was to be treated as sufficient for converting a privately incorporated stock exchange into a "public authority" under the 2005 Act, all similarly placed private entities such as commercial banks, mutual funds, insurance companies, depositories, non banking financial corporations would all become "public authorities" as they were subject to regulatory control by sectoral regulators, said NSE. 

 

NSE, which is targeting a September launch for its initial public offering, reported a 7% on-year rise in its consolidated net profit for the June quarter at INR 31.20 billion. The exchange's consolidated revenue from operations rose 13% on year to INR 45.60 billion.  End

 

Reported by Surya Tripathi

Edited by Deepshikha Bhardwaj

 

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