SEBI Affirms Regulatory Boundaries: Appellate Authority Dismisses RTI Appeal Challenging Exchange Glitches and Broker Protocols

SEBI Affirms Regulatory Boundaries: Appellate Authority Dismisses RTI Appeal Challenging Exchange Glitches and Broker Protocols​

The Scope of Inquiry: Technical Failures and Market Protocols​

A significant regulatory clarification emerged on June 04, 2026, as the SEBI Appellate Authority addressed Appeal No. 6875 of 2026. The appeal was filed by Deepak Kumar against the CPIO, SEBI, Mumbai, regarding information requests made under the Right to Information (RTI) Act, 2005.

The core of the appellant's application centered on market resilience and systemic integrity. Specific queries sought confirmation regarding a potential technical or server issue reported on the Multi Commodity Exchange of India (MCX) on December 29, 2025. The appellant also demanded documentation concerning standard protocols for exchanges and brokers when such technical glitches occur.

Other critical questions raised included mandatory reporting requirements for brokers regarding system issues to both the exchange and SEBI. Further inquiries sought relevant circulars from SEBI or exchanges addressing order execution failures or system glitches.

SEBI's Defense: Compliance Documentation Provided​

In response to the RTI application, the respondent (SEBI) provided detailed information tailored to different aspects of the queries. Regarding technical issue confirmation (Q1 and Q2), SEBI stated that these queries were in the nature of seeking clarification or conformation. Consequently, they held that such clarifications could not be construed as 'information' under Section 2(f) of the RTI Act.

However, concerning market compliance frameworks (Q3 through Q7), the respondent provided comprehensive details. The response included links to relevant circulars and notifications issued by SEBI and exchanges regarding technical glitches. Furthermore, information was supplied on the regulations governing action against brokers for submitting false or misleading data related to trades or system issues.

Appellate Verdict: Limiting RTI Scope​

The Appellate Authority reviewed both the initial application and SEBI's detailed response before issuing its final determination. The Authority concurred with the original respondent regarding queries 1 and 2, concluding that those questions sought clarification from the authority rather than pre-existing 'information.'

Citing established principles (such as Azad Singh vs. CPIO, Oriental Insurance Company Limited), the Appellate Authority stressed that the CPIO is a communicator of records, not an interpreter or researcher. The regulatory body cannot be expected to deduce information or provide opinions on behalf of the appellant when such views are not available on record.

Conclusion: Regulations and Oversight Confirmed​

For queries 3 through 7—covering compliance frameworks, regulations, and reporting mechanisms—the Appellate Authority found that SEBI had adequately addressed them by furnishing all available information. The ruling affirmed that SEBI has issued a specific framework to address 'technical glitches' in brokers' Electronic Trading System, which details instances not required for mandated reporting.

Based on these comprehensive findings, the Appellate Authority determined there was no need to interfere with the decision of the respondent (SEBI). The appeal was consequently dismissed, underscoring the defined boundaries of information dissemination under regulatory appeals.