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SEBI Tightens Rules: Index Providers Must Register for Key Benchmarks

SEBI has directed index providers of 'significant indices' to register within six months under new regulations to enhance transparency and accountability. Indices are considered significant if daily average AUM tracking them exceeds Rs 20,000 crore for six months. Providers must form separate legal entities if they also operate in other SEBI-regulated capacities. Exemptions apply to indices notified by RBI as significant or authorized benchmarks.

Key Points: SEBI Mandates Registration for Index Providers of Key Benchmarks

  • SEBI mandates registration for significant index providers within six months
  • Significant indices defined by AUM over Rs 20,000 crore for six months
  • 48 indices identified; providers include NSE, BSE, CRISIL
  • Separate legal entity required for multi-role providers within two years
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SEBI tightens rules, mandates index providers to register for key benchmarks

SEBI directs index providers of 'significant indices' to register within six months, enhancing transparency and accountability. Exemptions for RBI-notified benchmarks.

"If an entity registered with Sebi in any other capacity, also provides 'significant indices'... shall be required to form a separate legal entity - SEBI Circular"

New Delhi, May 6

The Securities and Exchange Board of India has directed index providers of 'significant indices' to register with it within six months under the Index Provider Regulations to foster transparency and accountability in governance and administration of Indices.

However, index providers whose indices are notified by the Reserve Bank of India (RBI) as 'significant benchmarks' or 'authorised benchmarks' are exempt.

The benchmarks or indices will be considered 'significant indices' if the daily average cumulative assets under management (AUM) tracking them across mutual fund schemes exceeds Rs 20,000 crore for each of the previous six months ending June 30 and December 31 each year.

SEBI has identified 48 such indices based on AUM data for July-December 2025. They comprise equity and debt benchmarks across providers including NSE Indices, BSE Index Services, and CRISIL.

Once specified by the Board in the list of 'significant indices', they shall continue to remain the same, unless the value of cumulative AUM tracking or benchmarking such Index does not meet the specified threshold for a continuous period of three years.

"If an entity registered with Sebi in any other capacity, also provides 'significant indices' by undertaking index provider activities departmentally, shall be required to form a separate legal entity to carry out the activities of an index provider within a period of two years from the date of this circular," the circular noted.

The current index providers may continue their operations if they submit their application for registration within the next six months.

Further, it clarified that the grievance redressal mechanism shall apply only to 'significant indices' provided by the Index Providers registered with SEBI.

Accordingly, subscribers significant indices shall have recourse to grievance redressal under IP Regulations, it added.

- IANS

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Reader Comments

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Priya S
I've been tracking mutual funds for years and never knew index providers weren't registered. This is good for retail investors like me who blindly invest in index funds. But six months for registration seems too long — they should fast-track it. Also hope this doesn't increase costs for AMCs which eventually pass to investors.
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Vikram M
A much-needed regulatory step IMO. The ₹20,000 crore threshold is sensible — only indices with significant market impact need oversight. But I'm concerned about the exemption for RBI benchmarks. Why should they be treated differently? Either all indices should follow same rules or none. Consistency please, SEBI!
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James A
As someone working in fintech, this is massive. Index providers have had way too much freedom. The separation of index activities into separate legal entities within 2 years is particularly interesting — will force many big houses to restructure. But will this actually improve data quality for investors? Let's see. 😏
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Siddharth J
Good move by SEBI but typical Indian regulation — too little too late. Index providers have been operating without oversight since the 1990s! At least they're finally acting. The grievance redressal mechanism for significant indices is a welcome step. Now ordinary investors can actually complain if something goes wrong with index calculation. 💪
S
Sarah B
This is smart regulation. In the US, index providers don't face such stringent rules and we've seen issues with manipulation. India is leapfrogging with proactive oversight. But 48 indices identified based on just 6 months of data seems premature — should be at least 12 months to avoid volatility affecting list. Also hope there's

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