SEBI Index Providers Regulations, 2024

Source-This post on SEBI Index Providers Regulations, 2024 is based on the article “Sebi mandates registration of index providers under regulatory fold” published in “Business Standard” on 10th March 2024.

Why in the News?

The Securities and Exchange Board of India (SEBI), in its latest regulations, has mandated index providers overseeing “significant indices” linked to Indian securities to register with the SEBI. This measure aims to improve transparency in the governance of financial benchmarks indices.

What do the SEBI Index Providers Regulations of 2024 say?

1. The regulations necessitate index providers such as NSE Indices and Asia Index (AIPL) to register with SEBI. Additionally, they must publicly disclose their methodology documents and comply with a code of conduct.

2. Global index providers like MSCI, Nasdaq, and FTSE Russell might be exempted from registration requirements unless their indices are significantly utilized by domestic asset managers.

What are Indices?

1. Indices are statistical tools employed to monitor the performance of a collection of assets or securities within a specific market.

2. They act as reference points or signals for investors, offering insights into the overall performance and trends of a particular market segment.

3. Indices are composed of stocks, bonds, commodities, or other financial assets, allowing investors to track changes in different sectors or the overall market.

4. Examples– Sensex and Nifty 200 in India, and S&P 500, Dow Jones Industrial Average, and NASDAQ Composite in the United States.

UPSC Syllabus- Indian Economy