SEBI mandates registration of index providers under regulatory fold
The Securities and Exchange Board of India (SEBI) has mandated registration of index providers managing “significant indices” based on securities listed in India to foster transparency in governance and administration of financial benchmarks in the securities market. The regulator notified the Securities and Exchange Board of India (Index Providers) Regulations, 2024, nearly a year after its board first approved the norms.
The global index providers, however, may not have to register with SEBI unless their indices are used as benchmarks by domestic asset managers with large corpus. SEBI has excluded indices that are for exclusive use in a foreign jurisdiction. Benchmarks regulated by the Reserve Bank of India (RBI) are also excluded from these regulations.
NSE Indices, which has popular indices such as the Nifty50 and Nifty Bank, and the Asia Index (AIPL), which compiles the Sensex, will have to register with SEBI.
APIL is an equal joint venture between the BSE and S&P Dow Jones Indices. However, S&P Dow Jones Indices has announced its plan to exit the JV. Those impacted will not just have to register with SEBI, but also have to make the methodology documents public, follow a code of conduct, and bring more transparency on inclusion and exclusions.
