UPSC Prelims Practice Questions — NSE is a public authority under RTI Act, says Delhi HC

Q1. In the Right to Information Act, 2005, the definition of the term 'public authority' — the very expression on which the NSE litigation turned — is contained in which one of the following clauses of Section 2?

  • A. Section 2(f)
  • B. Section 2(h)
  • C. Section 2(j)
  • D. Section 2(n)

Q2. Consider the following bodies with reference to the definition of 'public authority' under Section 2(h) of the RTI Act, 2005: 1. A body established by or under the Constitution. 2. A body constituted by a notification or order made by the appropriate Government. 3. A non-Government organisation substantially financed, directly or indirectly, by government funds. 4. A private company that is merely regulated by a statutory authority, without any government financing or control. Which of the above is/are correctly identified as falling within the scope of Section 2(h)?

  1. A body established by or under the Constitution.
  2. A body constituted by a notification or order made by the appropriate Government.
  3. A non-Government organisation substantially financed, directly or indirectly, by government funds.
  4. A private company that is merely regulated by a statutory authority, without any government financing or control.
  • A. 1, 2 and 3
  • B. 1 and 4
  • C. 2, 3 and 4
  • D. 1, 2, 3 and 4

Q3. In holding the NSE to be a 'public authority', the Delhi High Court found that the exchange could not function at all without the statutory recognition of which one of the following bodies?

  • A. The Reserve Bank of India
  • B. The Securities and Exchange Board of India
  • C. The Ministry of Corporate Affairs
  • D. The Registrar of Companies

Q4. The Delhi High Court held NSE a public authority under the FIRST part of Section 2(h). Which one of the following best captures the precise legal characterisation the court adopted for this limb?

  • A. That NSE was 'established or constituted' by an order of the Government, because SEBI's recognition was indispensable for it to function
  • B. That NSE was 'substantially financed' directly by funds provided by the Government
  • C. That NSE was 'owned' by SEBI as its holding regulator
  • D. That NSE was a 'non-Government organisation' substantially financed by the Government

Q5. The Board of the Securities and Exchange Board of India, as constituted under Section 4 of the SEBI Act, 1992, consists of a total of how many members, including the Chairman?

  • A. Six
  • B. Nine
  • C. Eleven
  • D. Five

Q6. In the context of SEBI's regulation of stock exchanges under the SCRA, the term 'demutualisation' of a recognised stock exchange most precisely means:

  • A. The segregation of ownership and management of an exchange from the trading rights of its members
  • B. The conversion of a listed public company into a private company
  • C. The amalgamation of two recognised stock exchanges into a single entity
  • D. The listing of an exchange's own equity shares on a rival exchange

Q7. Which one of the following most precisely describes the legal form in which the National Stock Exchange of India was originally set up in 1992?

  • A. A company under the Companies Act, which required SEBI recognition to operate as a stock exchange
  • B. A statutory corporation created directly by an Act of Parliament
  • C. An attached department of the Ministry of Finance
  • D. A mutual association owned collectively by its member-brokers

Q8. With reference to the National Stock Exchange's structure and early history, consider the following statements: 1. NSE was set up as a demutualised entity, separating broker ownership from exchange governance. 2. NSE received SEBI recognition in April 1993 and commenced trading operations in 1994. 3. NSE commenced its capital market (equities) segment before it commenced its wholesale debt market segment. Which of the statements given above is/are correct?

  1. NSE was set up as a demutualised entity, separating broker ownership from exchange governance.
  2. NSE received SEBI recognition in April 1993 and commenced trading operations in 1994.
  3. NSE commenced its capital market (equities) segment before it commenced its wholesale debt market segment.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q9. A stock exchange such as NSE can lawfully operate as a 'recognised stock exchange' only by virtue of recognition granted under which one of the following statutes?

  • A. The Securities Contracts (Regulation) Act, 1956
  • B. The SEBI Act, 1992
  • C. The Companies Act, 2013
  • D. The Depositories Act, 1996

Q10. Apart from the 'established by government' limb, the Delhi High Court also brought NSE within Section 2(h) on the strength of which one of the following tests?

  • A. The government's and SEBI's 'deep and pervasive control' over NSE
  • B. The mere existence of routine regulatory oversight by SEBI
  • C. NSE being wholly financed out of the Consolidated Fund of India
  • D. A majority of NSE's shareholding being held by the Central Government

Q11. Under the Right to Information Rules, 2019, the Chief Information Commissioner and every Information Commissioner hold office for a term of:

  • A. Five years or till attaining the age of 65 years, whichever is earlier
  • B. Six years or till attaining the age of 65 years, whichever is earlier
  • C. Three years or till attaining the age of 62 years, whichever is earlier
  • D. Five years or till attaining the age of 62 years, whichever is earlier

Q12. SEBI's power to inspect, call for information from, and impose penalties on market intermediaries such as the NSE is principally derived from which one of the following statutes?

  • A. The SEBI Act, 1992
  • B. The Prevention of Money Laundering Act, 2002
  • C. The Companies Act, 2013
  • D. The Reserve Bank of India Act, 1934