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The Securities and Exchange Board of India (SEBI) has directed providers of designated ‘significant indices’ to apply for registration within six months under the SEBI (Index Providers) Regulations, 2024. In a circular issued earlier this week, the regulator defined significant indices as benchmarks tracked by mutual fund schemes with average cumulative assets under management (AUM) exceeding INR 20,000 crore for six consecutive months. SEBI also released an initial list of 48 significant indices, including Sensex, Nifty 50, Nifty Bank and several debt and hybrid benchmarks administered by NSE Indices, BSE Index Services and CRISIL. The move forms part of a broader regulatory framework aimed at increasing transparency, governance standards and accountability in the administration of market indices used across India’s securities ecosystem.
The Securities and Exchange Board of India (SEBI) has asked providers of designated ‘significant indices’ to obtain regulatory registration within six months, formalising oversight of benchmark administrators under the SEBI (Index Providers) Regulations, 2024. The directive was issued through a circular released earlier this week and comes as the regulator moves to strengthen governance standards for indices widely used across India’s securities market. Advertisement
Under the framework notified by SEBI, a benchmark or index based on listed securities will qualify as a ‘significant index’ if the daily average cumulative assets under management (AUM) tracking the benchmark across mutual fund schemes exceeds INR 20,000 crore during each of the previous six months ending June 30 and December 31 annually.
SEBI stated that index providers administering such benchmarks must apply for registration in accordance with the Index Providers Regulations within six months from the date of the circular. The requirement will apply to entities providing any index included in the regulator’s notified list of significant indices.
The regulator also clarified that an index once classified as significant would continue to remain under the category unless the cumulative AUM tracking the benchmark falls below the prescribed threshold continuously for three years, equivalent to six consecutive half-yearly reviews.
As part of the circular, SEBI released an initial list of 48 significant indices identified on the basis of mutual fund AUM data between July and December last year. The notified benchmarks include widely tracked equity indices such as BSE Sensex, BSE 100, Nifty 50, Nifty Bank, Nifty Next 50 and Nifty 500, along with several debt, hybrid and thematic indices administered by NSE Indices Limited, BSE Index Services Pvt Ltd and CRISIL.
The circular further stated that entities already registered with SEBI in another capacity but carrying out index provider activities internally would be required to establish a separate legal entity for index administration within two years. However, certain benchmarks recognised by the Reserve Bank of India as ‘significant benchmarks’ or ‘authorised benchmarks’ under RBI regulations will remain outside the purview of the SEBI framework.
SEBI noted that the new regulatory structure has been introduced to improve transparency and accountability in the governance and administration of indices used in the Indian securities market. The framework also brings registered providers of significant indices under a formal grievance redressal mechanism applicable to subscribers of such benchmarks.
The provisions of the circular have come into effect immediately. Existing index providers administering significant indices may continue operations during the interim period, provided they submit registration applications within the stipulated six-month timeline.
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