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Securities and Exchange Board of India (SEBI) | Association of Mutual Funds in India (AMFI)
SEBI has issued a consultation paper and draft circular to define and regulate ‘Significant Indices’ within the Indian securities market. The proposal, developed in consultation with AMFI, aims to foster transparency and accountability in the governance and administration of indices that have a substantial impact on domestic mutual fund investments. Under the draft norms, any benchmark or index based on listed securities is classified as “significant” if it is tracked by mutual fund schemes with cumulative Assets Under Management (AUM) exceeding ₹20,000 crore. Providers of these identified indices must apply for SEBI registration within six months of the circular’s issuance to ensure regulatory oversight.
Criteria for Identifying Significant Indices
AUM Threshold: An index is deemed significant if the cumulative AUM of domestic mutual fund schemes tracking it exceeds ₹20,000 crore. This classification ensures that indices which deeply influence the portfolios of millions of retail and institutional investors are subject to stricter standards of governance, administration, and transparency to protect investor interests.
Computation Methodology: The AUM is calculated based on the daily average of mutual fund schemes for each month over a six-month period ending June 30 or December 31.
Proportional Tracking: For schemes tracking multiple benchmarks, only the specific portion of AUM tracking the respective index is included in the computation.
Index of Indices: In the case of an index of indices, the underlying AUM is calculated in proportion to the respective weights of the indices involved.
Regulatory Scope and Compliance
Registration Requirement: Providers of Significant Indices must register as an Index Provider under Regulation 4 of the SEBI Regulations, 2024, within a six-month window.
Exclusion for RBI-Regulated Benchmarks: The requirement does not apply if the index is already regulated by the Reserve Bank of India (RBI), including significant benchmarks notified under the RBI Act, 1934.
Grievance Redressal: Recourse under SEBI’s grievance redressal mechanism (Regulation 23) will be available specifically for subscribers to Significant Indices provided by SEBI-registered entities.
Initial List of Indices: The draft includes an initial list of 47 Significant Indices provided by BSE Index Services, CRISIL, and NSE Indices Limited based on data from January to June 2025.
Policy Relevance
The move represents a critical step in maturing India’s financial market infrastructure by bringing the providers of market benchmarks under formal regulatory scrutiny.
Strategic Impact:
Enhanced Market Integrity: By regulating the administration of indices, SEBI ensures that the benchmarks used for measuring mutual fund performance are reliable and free from manipulation.
Investor Protection: Linking grievance redressal specifically to registered providers offers a clear legal recourse for investors and subscribers affected by index-related issues.
Institutional Accountability: The requirement for a six-month registration window forces index providers to formalize their internal governance structures and compliance mechanisms.
Regulatory Harmony: Explicitly excluding RBI-regulated benchmarks prevents jurisdictional overlap, ensuring a streamlined compliance environment for financial institutions.
Relevant Question for Policy Stakeholders: How will the SEBI (Index Provider) Regulations, 2024 affect the cost of compliance for domestic mutual funds that track multiple ‘Significant Indices’ from diverse providers?
Follow the full update here: Consultation Paper: Circular under SEBI (Index Providers) Regulations, 2024