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jps50

Rbi to open up as per hon'ble supreme court judgement

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jps50

My friend Shri Jayantilal Mistry [semi literate but socially active] of Vadodara Gujarat had sought information including RBI audit report of a coop bank from Reserve Bank of India under RTI Act on 19-10-2010, which was denied under sections 8.1 a [economic interest of country], and 8.1.e [fiduciary relationship]. First appeal failed and hence second appeal was filed with Central Information Commission, which was decided on 01-11-2011 in appellant’s favour and RBI was ordered to supply information. RBI obtained stay order from Hon’ble High Court of Delhi on 29-11-2011. We filed a detailed reply to writ petition in High Court directly without assistance of advocate. Subsequently some interveners were permitted at High Court. In May 2015, at the instance of RBI writ was transferred to Hon’ble Supreme Court since on similar issues 11 writs of RBI were pending in various High Courts. Finally on 16-12-2015 Divisional Bench of 2 judges of Hon’ble Supreme Court upheld decision of CIC in writ petition No. 91/2015. It is a landmark judgment disposing off 11 writs which were filed by RBI in various High Courts against CIC decisions to disclose under RTI Act. Full judgement is available on website of Supreme Court er item No. 5--RBI v/s Jayantibhai N. Mistry. It is worth reading.

 

I am happy to be actively associated with this case.

 

Judgement is posted at

 

http://www.rtiindia.org/forum/168021-supreme-court-landmark-judgement-against-reserve-bank.html

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jj99

Thanks for Hard Work, Fourm says thanks jps50

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Prasad GLN

The task is not complete. The doors are just opened. What is there inside the locked doors, and how to bring out from RBI for all Banks (Public & Private) has to be guided through a blog. Only a blog by Hon JPS will open the doors wide open, which they were guarding for a decade. Now we can not only fix Banks, but can also question RBI on proper scrutini, as any verification sincerely brings early symptoms and inaction / negligence of Banks and supervision by RBI.

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Prasad GLN

@murgi,

As you know what information you require SEBI through RBI, after studying SC judgment, restructure your queries and file them before RBI afresh, quoting the citation, if you are sure that that information is readily available with RBI, as a return/statement from SEBI to RBI.

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murgie

The information is with Sebi itself, not Sebi thru RBI. Only the objections given by Sebi -- 8.1.a, 8.1.d and 8.1.e -- are the same ones that RBI used. And in my amateur view, Sebi's arguments are even more flaky and outrageous. There is less likelihood of any individual harm, and even easier to argue for the public interest. I was only looking for a proper way to refer to the judgment and say, "As for RBI, so for SEBI."

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Prasad GLN

Please kindly go through SC judgment, the issue is simple as to whether information provided by commercial banks to SC are held by them under fiduciary capacity, and the SC ruled NO.

It is not clear as to whether member has filed second appeal against SIDBI in CIC. If he has filed, he can only wait for hearing and then cite the SC judgment.

or else let some of his friend file application afresh in his name seeking same information and enclosing the SC Judgment and asking them, if the information is denied, justify their denial on the basis of recent SC Judgment. (This has to be done at FAA level)

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jj99
Thanks for Hard Work, Fourm says thanks jps50

@jps50

 

I will further request jps50 come out with ready made handbook for reference purpose (what type of records are made public records by this SC order )

 

which will enable all to quote this SC order in RTI applications

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murgie

My saga continues. My fresh application to SEBI for stale masked historical-archival FII data for academic research (to solve a problem posed by changing masks), after the 16th Dec 2015 Supreme Court ruling against RBI on a slew of RTI cases, has been rejected.

 

There is progress to the extent that there is no reference to "fiduciary interest" any more, or to "national security." But the cryptic CPIO response still refers to "commercial confidence" and "invasion of privacy" (despite only masked information being sought).

 

I am writing to ask for guidance and help finding links to similar arguments that no doubt many before me had to face. From my search on this site using "commercial confidence" as the search keywords, and then plowing thru a little bit, I found a jps50 post http://www.rtiindia.org/blogs/3336-refusal-information-u-s-8-1-d-rti-act.html which was educational.

 

My circumstances are different from the case that provoked that post by jps50. I am attaching the last RTI query (n-th in a long series) together with the CPIO's response. In particular I thought the lack of any trade secret, patent, etc being involved here, and the obvious public interest that SEBI is charged with (both under the laws that require it to establish a "level playing field," and more specifically in the Insider Trading law) would make public-interest reason for disclosure overcome any arguments relating to commercial confidence, which per a ruling of Shailesh Gandhi, CIC (see RTI Judgement Series: PIO cannot deny information citing ?commercial confidence? - Moneylife). But it wasn't. In fact the SEBI CPIO's response uses the phrase "level playing field" to clearly mean "preserve the insider's advantage!!" It is virtually arguing that it has a duty to protect that advantage.

 

Similar data is routinely released by exchanges and regulators the world over, especially in OECD countries, where public-interest arguments are often not even necessary as it has become routine for academics to work with data of this kind.

 

I need to file an appeal with SEBI in 5 days. Any help, suggestions, comments, will be greatly appreciated. I am looking in particular for links to rulings, or discussions of strategies, relating to situations involving markets. My attachments will make things clearer. Thank you.

 

Murgie

 

PS -- This thread is related to some posts (including a couple by me) on another thread: http://www.rtiindia.org/forums/168020-rbi-open-up-per-honble-supreme-court.html

new_RTI_query__to_SEBI_re_FII_ID_masks_30th_Dec_2015_v1.pdf

Reply_Murugappa_Krishnan_3_2016_2347.pdf

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murgie

My appeal to the SEBI Appellate Officer is attached. Basically, I relied a lot on a blog entry by jps50 on the "commercial confidence" argument, and tried adapting a bit of the Supreme Court's reasoning in dismissing the fiduciary interest arguments in its judgment on 16th Dec 2015.

RTI_Appeal_to_SEBI_24th_Feb_2016_re_FII_ID_masks.pdf

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murgie

Just got (on 7th April 2016 on email) a (delayed but back-dated) response from the SEBI Appellate Officer rejecting my appeal by essentially just reciting the same provisions of the RTI Act (commercial confidence, invasion of privacy) that the SEBI CPIO did, without even a cursory attempt to relate the Act's provisions to case facts, or to address my arguments that public interest in this case is even specified by the statute.

 

I would appreciate comments and assistance in filing a Second Appeal with the CIC. My own appeal is also attached. Please help.

 

For your convenience let me summarize my position. Since the data sought will still have masked IDs, privacy is certainly not invaded. It does not involve a trade secret or patent but is part of what FII custodians file with SEBI as compliance. The data is always at least six months old (very stale market data useful only for academic research, very unlikely to move prices). SEBI's public interest responsibilities (for maintaining a level playing field in the market, to prevent or prosecute insider trading) are enumerated explicitly in statutes. The SC RBI judgment explicitly stated that the regulators' job is not maximizing the benefit to private parties but to uphold the public interest. Thank you.

from_SEBI_Appellate_Authority_Appeal No. 2395 of 2016 - Mr. Murugappa Krishnan.pdf

RTI_Appeal_to_SEBI_24th_Feb_2016_re_FII_ID_masks.pdf

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Prasad GLN

As far as SEBI is concernead, the same rule that applied to RBI applies to them. No commercial bank or organisation provides them data in fiduciary capacity. Larger public interest is definitely involved as as any window dressing or rosy picture is given to such companies when the position is bleak and Public are more concerned and companies take lower rankings, as common investors are more interested.

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murgie

From a brief conversation I had with two young lawyers (who to the best of my knowledge have no dog in this fight) there is a suggestion that I may have underestimated the strength of the "invasion of privacy" or "commercial confidence" arguments. While the data I seek will always have IDs masked, their argument, summarized roughly, was that by following even masked transactions for a given firm, one may sometimes tell whose transactions those are. And that this by itself may be a breach of privacy, and so a bad thing.

 

After much reflection on their comment, I have the following thoughts:

 

1. the most salient cases will be where the FIIs hold or trade a large block. But these are cases where unmasked disclosure of IDs is already mandated under the Insider Trading law.

 

2. for small trades, with masked IDs, and reported as in all cases with at least a six-month delay, it would be a stretch to say that from trading patterns in masked data we will be able to draw any inferences about whose trade it is. And even if we did this would be as innocuous as noting a shareholder's name in a shareholding pattern filing report (which was explicitly pronounced innocuous in a CIC judgment involving Kalanithi Maran and SUN-TV, Decision No. CIC/SG/A/2011/002664/17150 dated 30th Jan 2012 -- Shailesh Gandhi was the IC who wrote the judgment, http://rti.india.gov.in/cic_decisions/CIC_SG_A_2011_002664_17150_M_75555.pdf). So the argument that commercial harm will be caused seems weaker.

 

At least to suggest that harm can arise even with masked disclosure, and even six months after a trade, seems like a lot. But I am curious to know other opinions. As an academic researcher in financial markets, I am conditioned to believing that in an active market even 3 days is way too stale for any price-impact.

 

3. And of course, in 1 and 2 above I have not even begin noting the public interest. If any advantage a trader has accrues because of non-public price-sensitive information, the trade itself would be a violation of the insider trading law, and SEBI ought to be doing things to discourage that. This element of public-interest responsibility is written into the insider trading law.

 

4. Let us now assume that it is not because of non-public price-sensitive information but just superior intelligence and strategy that an FII trader is benefiting from, and that even uncovering this strategy would cause undue harm to him, because others would learn the same strategy.

 

This is not in the same category as a trade secret or legal patent or something that SEBI gets which is marked "Commercial, In Confidence." SEBI gets the data simply form mandated compliance filings by FII custodians (mostly large banks). The law mandates that SEBI create a level playing field for all participants in the market, and this mandate includes helping every participant become better informed. Market informational efficiency does not come out of thin air, but comes from more and more market participants becoming better informed and more sophisticated. So SEBI should welcome academic research that helps everyone understand how markets function. In my view, this public-interest responsibility is also written into law, the law that created SEBI and charged it with creating a level playing field.

 

5. Think about what is standard fare in a first course in finance all over the world -- market informational efficiency, responding to risk by holding both equity and debt, or cash, or by diversifying. These decades-old results which are today taken as self-evident truths were initially gleaned from data about individual investors (presumably masked). Countless papers have been written with data of that kind, and similar masked bank account data. So the public interest argument seemed easy to make. Yet at least civil servants in SEBI seem bold in behaving as if establishing a level playing field by making more market participants informed and sophisticated is not part of its regulatory mandate.

 

But I am concerned that even among reasonable people there is some hesitation to accept that this is a clear case where either there is no privacy or commercial confidence involved, or even if there is, it is trumped by the right to information in the public interest. I'd be very grateful for comments, opinions and suggestions.

Edited by murgie
typos

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murgie

If you google on "CIC/SG/A/2011/002664/17150" it brings up a link to a PDF copy of Shailesh Gandhi's judgment. Not sure why the old link no longer works. On my cell phone I don't see a way to attach the PDF file, or I would upload a copy of the judgment.

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murgie
If you google on "CIC/SG/A/2011/002664/17150" it brings up a link to a PDF copy of Shailesh Gandhi's judgment. Not sure why the old link no longer works. On my cell phone I don't see a way to attach the PDF file, or I would upload a copy of the judgment.
https://www.google.com/url?sa=t&source=web&rct=j&url=http://ciconline.nic.in/cic_decisions/CIC_SG_A_2011_002664_17150_M_75555.pdf&ved=2ahUKEwjTyYKy5-bYAhVDZN8KHWt8D_4QFjABegQIBxAB&usg=AOvVaw1p-RuJWUOA0dew79W6fhrx

CIC_SG_A_2011_002664_17150_M_75555.pdf

 

Sent from my Nexus 5X using RTI INDIA mobile app

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