SEBI introduces new framework classifying benchmark indices as “significant indices” under stricter oversight norms

SEBI has introduced a new regulatory framework to classify benchmark indices used in mutual fund schemes as “significant indices” if they exceed ₹20,000 crore in average daily assets under management over a six-month period. The classification will be reviewed twice a year based on periods ending June 30 and December 31

Mumbai | 07 May 2026: The Securities and Exchange Board of India (SEBI) has issued a revised framework under the SEBI (Index Providers) Regulations, 2024, introducing stricter norms for identifying and regulating key market benchmarks. Under the new rules, any index used as a benchmark by mutual fund schemes will be designated as a “significant index” if the average daily combined assets under management linked to it exceed ₹20,000 crore over a continuous six-month period. The evaluation will be conducted twice annually, ensuring periodic assessment of market-relevant indices.

The regulator stated that the objective of the framework is to improve transparency and accountability in the index ecosystem, which plays a critical role in passive and active investment strategies. By formally categorising widely tracked indices as significant, SEBI aims to ensure stronger oversight of how these benchmarks are constructed, maintained, and used by market participants.

The initial classification includes major indices such as Nifty 50 and BSE Sensex, along with broader market indicators like Nifty 500 and BSE 500. These indices are widely followed by domestic and global investors and represent a substantial portion of India’s equity market activity.

SEBI has made it mandatory for index providers offering significant indices to apply for registration within six months of meeting the eligibility criteria. Existing registered entities will also be required to establish a separate legal entity dedicated to index provider operations within two years. This structural requirement is intended to enhance governance clarity and regulatory supervision.

Once classified as significant, an index will continue to remain in the category unless its associated assets under management remain below the threshold for three consecutive years. The framework is expected to bring greater discipline to the index provider industry and align India’s benchmark governance standards with global best practices.

Follow us On Our Social media Handles :
Instagram
Youtube
Facebook
Twitter

Also Read- Pune