SEBI proposes a regulatory framework for index providers; prescribes various compliances
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- Last Updated on 9 May, 2023
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News Dated, 28-12-2022
With the objective of furthering transparency and accountability in financial benchmarks/indices in the Indian securities market, the SEBI has proposed a regulatory framework for index providers. Under the framework, the Index providers offering indices for use in India shall be required to register with the SEBI for the introduction of indices in India. Further, it shall be a legal entity incorporated under the Companies Act.
The framework prescribes that the Index Provider shall have a minimum net worth of Rs.250 million (Rs.25 crore) and shall have a track record of minimum 5 years of index administration. Also, Index Provider shall constitute an oversight committee for reviewing existing index design. The oversight committee shall also review any proposed changes to benchmark methodology.
Further, Index provider shall have policies and procedures to manage conflicts of interest and to protect the integrity and independence of various functions performed in connection with determination of indices. Also, Due-diligence on data submitters shall be performed by index providers and a code of conduct for data submitters covering quality, oversight, conflict of interest, record keeping etc. shall be put in place.
Any comments on proposed regulations may be sent by e-mail to Shri Vishal Shukla (vishals@sebi.gov.in) and Shri Anuvesh Nigam (anuveshn@sebi.gov.in) latest by January 27, 2023
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