The Securities and Exchange Board of India (SEBI) is considering a ₹20,000 crore asset threshold to identify “significant indices” that will come under stricter regulatory oversight, as part of its newly notified Index Providers Regulations, 2024.
In a consultation paper released on Monday, SEBI said an index would be deemed “significant” if it is tracked or used as a benchmark by domestic mutual fund schemes with cumulative assets under management (AUM) exceeding ₹20,000 crore. Such indices would be subject to enhanced governance, disclosure and compliance requirements under the new framework.
The move is aimed at strengthening transparency and accountability in the fast growing passive investment ecosystem, where index-linked products such as exchange-traded funds (ETFs) and index funds now account for a rising share of retail and institutional investor money.
Market participants say the proposal addresses a long standing regulatory gap, as index providers play a critical role in shaping portfolio construction, risk exposure and capital allocation, but have so far operated with limited oversight compared to asset managers and intermediaries.
SEBI noted that with passive strategies gaining traction, especially among long-term and cost-conscious investors, ensuring the integrity of benchmark indices has become essential to protect investor interests and maintain market confidence.
The regulator has invited public comments on the proposal, after which the final contours of the framework are expected to be notified. If implemented, the rules could bring several widely tracked indices under direct regulatory supervision for the first time, marking a significant shift in India’s market governance architecture.
Follow Startupbydoc for daily startup insights, funding news, IPO analysis, and business breakdowns.