SEBI Proposes Regulatory Framework For Index Providers

The Securities and Exchange Board of India (SEBI) has recently, on 28th December 2022, proposed a regulatory framework for index providers who offer indices for use in India. As per the consultation paper, the regulatory framework carries the objective of furthering transparency and accountability in governance and administration of the financial benchmarks / indices in the Indian securities market.

The regulatory framework is based on the recommendations of the Secondary Market Advisory Committee (SMAC) and has the following salient features:

• The framework shall adhere to International Organization of Securities Commissions (IOSCO) principles. The index provider shall be assessed by independent external auditors to evaluate adherence to the IOSCO principles.