Securities and Exchange Board of India (Index Providers) Regulations, 2024
Summary
This part sets out the preliminary framework of the SEBI (Index Providers) Regulations, 2024, including short title, commencement on the 180th day from publication, and definitions for 25 terms such as Administration, Benchmark, Index Provider and Significant Indices. It limits applicability to Index Providers administering Significant Indices comprising securities listed on a recognized stock exchange in India for use in the Indian securities market while exempting providers of global-asset indices and indices for exclusive foreign use and RBI-regulated benchmarks. It prohibits acting as an Index Provider without Board registration, allows existing providers a six-month transitional period to continue pending application disposal, and mandates application in Form A with fees and an IOSCO Principles compliance assessment report. This part prescribes eligibility criteria for Index Provider registration including incorporation under the Companies Act, 2013, minimum net worth of twenty-five crore rupees, infrastructure and fit and proper requirements. It lays down the procedure for application scrutiny, furnishing information, grant of certificate in Form B, conditions of certificate
Text
These regulations may be called the Securities and Exchange Board of India (Index Providers) Regulations, 2024.
These regulations shall come into force on the one hundred and eightieth day from the date of their publication in the Official Gazette.
"Administration" means all stages and processes involved in the production and dissemination of a benchmark or index, and includes — (i) collecting, analyzing or processing information or expressions of opinion for the purposes of determination of a benchmark or index; (ii) determining a benchmark or index through the application of a formula or through another method of calculating the information or expressions of opinions provided for that purpose; and (iii) dissemination to subscribers, including any review, adjustment and modification to this process.
"Audit Trail" means the documentation and retention of all relevant data, submissions, other information, judgments, including the rationale for any inclusion or exclusion of data, analysis and identities of submitters of information used in the benchmark setting process for an appropriate period;
"Benchmark" or "Index" means prices, estimates, rates or values, used in relation to securities that are: (i) made available to subscribers; whether free of charge or for payment; (ii) calculated periodically; entirely or partially by the application of a formula or another method of calculation or an assessment of the value of one or more underlying interests; (iii) used as reference for purposes that include: 1. determining the price at which a financial instrument may be bought or sold or traded or redeemed or the value of a financial instrument; or 2. measuring the performance of a financial instrument.
"Expert Judgement" means the exercise of discretion by an Index Provider or Submitter with respect to the use of data in determining a Benchmark with due documentation of the rationale and includes extrapolating values from prior or related transactions or adjusting values for factors that might influence the quality of data such as market events or impairment of the credit quality of a buyer or seller;
"Index Provider" means a person who controls the creation, operation and administration of a Benchmark or an Index, whether or not it owns the intellectual property rights relating to the Benchmark or an Index, and is in particular, responsible for all stages of the Benchmark or an Index administration process, including: (i) the calculation of the Benchmark or an Index; (ii) determining and applying the Benchmark or an Index methodology; and (iii) disseminating the Benchmark or an Index.
"Methodology" means the written rules and procedures according to which information is collected and the Benchmark or an Index is determined;
"Publish or make available" refers to the requirement of an Index Provider to provide a document or notice to the Stakeholders where the means by which such notice is made, is proportionate to the breadth and depth of the use of Benchmark by the Stakeholders, as determined by the Index Provider on a "best effort" basis. Explanation: Document or notice published on the website of an Index Provider shall ordinarily be considered as compliance with this requirement;
"Significant Indices" means Indices administered by an Index Provider, which are tracked or benchmarked by domestic mutual fund schemes with the cumulative assets under management exceeding the limits as may be specified from time to time. Explanation: The list of ‘Significant Indices’ shall be specified by the Board from time to time.
"Submission" means and includes prices, estimates, values, rates or information provided by a Submitter to an Index Provider for the purpose of determining a Benchmark but does not include data sourced from Regulated Markets or Stock Exchanges with mandatory post-trade transparency requirements;
These regulations shall be applicable only to Index Providers that administer Significant Indices consisting of securities listed on a recognized stock exchange in India for use in the Indian securities market.
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Source: SecMarx — Securities and Exchange Board of India (Index Providers) Regulations, 2024. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.