SEBI Appellate Authority Rules on RTI Appeal: Internal Regulatory Data Exempted Due to Strategic Confidentiality Concerns

SEBI Appellate Authority Rules on RTI Appeal: Internal Regulatory Data Exempted Due to Strategic Confidentiality Concerns​

The Securities and Exchange Board of India (SEBI) has delivered a critical ruling regarding the disclosure of internal documents concerning the transmission of securities. The Appellate Authority, acting under the Right to Information (RTI) Act, 2005, clarified that certain regulatory information related to SEBI's supervisory role is exempt from public disclosure due to its strategic and fiduciary nature.

The appeal, filed by Samar Imran against the Central Public Information Officer (CPIO), SEBI, addressed a series of queries relating to the implementation and supervision of the "Legal Heirship Certificate" requirement in SEBI Master Circular dated February 6, 2026. The Appellate Authority's decision emphasizes the regulator's prerogative regarding confidential supervisory inputs.

Clarity on Public Domain vs Internal Functions​

The appeal sought detailed information, including file notings, internal correspondence, and drafts related to the inclusion of 'Legal Heirship Certificate (or its equivalent certificate)' in the specified Master Circular. The SEBI respondent initially claimed that some aspects of this inquiry fell under the purview of internal functions exempt from RTI disclosure.

Regarding specific queries concerning the use and acceptance of an 'equivalent certificate' by Registrar & Share Transfer Agents (RTAs), the Respondent pointed to the publicly available SEBI Master Circular for RTAs & STAs dated February 6, 2026. This circular provides guidance on heirship-related matters pertinent to RTAs.

Regulatory Inputs and Inspection Reports Are Strategic​

A significant aspect of the appeal concerned supervisory findings and internal notes related to compliance by RTAs with the SEBI Master Circular regarding securities transmission. The Appellate Authority upheld the respondent's assertion that this information is exempt under Section 8(1)(a) of the RTI Act.

The authority stated that inspection reports contain strategic regulatory inputs. Disclosure of these reports could potentially compromise SEBI's ongoing supervisory and regulatory decision-making processes. This aligns with established legal precedents concerning confidential business affairs and competitive interests.

Confidentiality of Complaints and Fiduciary Relationships​

When addressing requests for records detailing complaints or communications received by SEBI regarding non-acceptance of Legal Heirship Certificates, the Appellate Authority maintained that such information remains exempt from disclosure.

This finding is rooted in the principle of fiduciary relationships between SEBI and the various entities under regulatory review. Documents received by SEBI contain confidential information whose release could adversely impact the concerned entities or compromise SEBI's strategic considerations for future actions. The ruling referenced past judgments upholding this position.

Directives and Next Steps on RTI Compliance​

The Appellate Authority noted that while some aspects of internal workings are protected, other areas are in the public domain. For instance, enforcement orders passed by SEBI against entities are publicly available on the SEBI website.

In conclusion, the appeal was disposed of with specific directions given to the respondent. The CPIO is instructed to conduct a de novo (fresh) review concerning query number 4 and provide an appropriate response to the appellant within fifteen working days of receiving the order.