October 29, 2009

life in journalism & financial markets: no! its not appreciated!

As a financial journalist, covering financial markets in India for 19 long years, I have come across several disturbing things. This post is about one such thing.

If I have to bring about a deeper insight into issues that involve protecting basic rights of transparency of investors I am up against extremely cunning minds working in the securities market regulators, stock exchanges, depositories, brokers, depository participants, investment bankers etc.

This happens most often when I ask any of these clever people about the criteria they apply behind their policies and rules. Say I ask a broking firm, offering online trading to investors, "what are the criteria applied behind disabling of many derivatives contracts (that, otherwise, are getting traded on the exchange)?" I get this kind of answer, "You would appreciate that we will not be able to share the exact details of the algorithms we run and the criteria we
have for enabling and disabling."

This is so ridiculous. My answer is "No, sorry, it is not appreciated by me or my readers." Why should I blindly believe him that the alogs and criteria he is running for his clients is efficiently serving the purpose it is being claimed to serve (and that usually is "its for investors' interests")?

Similarly, when I ask NSE, BSE or Sebi, about what price and volume criteria they apply in their market surveillance systems, I never get the answer. I am bluntly told that it can't be disclosed. So, how can investors know whether NSE, BSE and Sebi are efficiently doing the job of ensuring there is no price manipulation?

Journalists are responsible to their readers and so they ask questions. Regulators and intermediaries are not responsible to my readers directly and so they evade these questions! The battle goes on.


Rahul Banerjee said...

with SEBI and NSE you can try filing an application under the Right to Information Act as these are government owned entities.

Rajesh Gajra said...

True. That can be attempted with Sebi. The NSE is not a government-owned company if one goes by the definitions under the RTI Act. But investors have filed RTI applications with NSE and BSE and the route can be explored further.