Sebi proposes framework for index providers

Mumbai: The Securities and Exchange Board of India (Sebi) on Wednesday proposed a regulatory framework for index providers.

The proposed framework would mandate index providers to adhere to International Organization of Securities Commissions (IOSCO) principles.

The proposed regulations would prescribe provisions to ensure eligibility criterion, compliance, disclosures, periodic audits, and penal action in case of non-compliance and incorrect disclosures.


At present, the benchmarks based on which products are traded on the Indian stock exchange platforms and indices tracked by the fund managers are owned and managed by entities which are generally either subsidiaries of stock exchanges or joint venture between an exchange and an index provider or any entity engaged in the activity of credit rating. Sebi had allowed the stock exchanges to introduce derivative products on foreign indices in January 2011.