SEBI mandates index providers to register within 6 months for significant benchmarks
Synopsis
SEBI has identified 48 significant indices — spanning equity and debt — and is now mandating their providers to register within six months, with a two-year deadline for structural separation. The move formalises oversight of a segment that underpins trillions in passive and benchmark-linked mutual fund investments across India.
Key Takeaways
SEBI has directed index providers of 'significant indices' to register under the Index Provider Regulations within six months .
48 indices have been identified as significant, based on AUM data for July–December 2025 , covering providers including NSE Indices , BSE Index Services , and CRISIL .
An index qualifies as 'significant' if cumulative daily average AUM tracking it across mutual fund schemes exceeds ₹20,000 crore for each of the previous six months.
Entities already registered with SEBI that also provide significant indices departmentally must form a separate legal entity within two years .
Indices notified by the RBI as 'significant benchmarks' or 'authorised benchmarks' are exempt from the requirement.
Grievance redressal under IP Regulations will apply only to significant indices provided by SEBI-registered index providers.
The Securities and Exchange Board of India (SEBI) has directed index providers of 'significant indices' to register with it within six months under the Index Provider Regulations, aiming to strengthen transparency and accountability in the governance and administration of market indices. The directive, issued from New Delhi on 6 May 2025, applies to providers whose benchmarks are tracked by mutual fund schemes with a daily average cumulative assets under management (AUM) exceeding ₹20,000 crore.
What Qualifies as a Significant Index
According to the SEBI circular, an index will be classified as a 'significant index' if the daily average cumulative AUM tracking it across mutual fund schemes exceeds ₹20,000 crore for each of the previous six months ending 30 June and 31 December each year. Based on AUM data for the period July–December 2025, SEBI has identified 48 such indices, spanning both equity and debt benchmarks across providers including NSE Indices, BSE Index Services, and CRISIL.
Once an index is specified by the Board as a significant index, it retains that classification unless the cumulative AUM tracking it falls below the prescribed threshold for a continuous period of three years.
Key Exemptions Under the Framework
Index providers whose indices are notified by the Reserve Bank of India (RBI) as either 'significant benchmarks' or 'authorised benchmarks' are exempt from the registration requirement. This carve-out acknowledges the parallel regulatory oversight already exercised by the RBI over certain financial benchmarks.
Structural Separation Requirement
The circular introduces a significant structural obligation: any entity already registered with SEBI in another capacity — but also providing significant indices through a departmental function — will be required to form a separate legal entity to carry out index provider activities. This structural separation must be completed within two years from the date of the circular. The measure is intended to prevent conflicts of interest and ensure dedicated governance for index operations.
Transition Period and Grievance Redressal
Existing index providers may continue their operations provided they submit their application for registration within the next six months. SEBI also clarified that the grievance redressal mechanism under the Index Provider (IP) Regulations will apply exclusively to 'significant indices' provided by SEBI-registered index providers. Accordingly, subscribers to significant indices will have formal recourse to grievance redressal under the IP Regulations framework.
The move marks a notable step in formalising oversight of a segment that underpins trillions of rupees in passive and benchmark-linked investments across India's mutual fund industry. Further implementation guidelines from SEBI are expected as the six-month registration window progresses.
Point of View
Yet the entities designing the benchmarks that drive trillions in AUM have operated in a regulatory grey zone. The structural separation requirement is the sharper edge of this circular: it targets the conflict of interest that arises when an exchange or rating agency both constructs an index and profits from the products tracking it. The three-year AUM-exit clause for delisting an index from the significant category deserves scrutiny — it could allow providers to game the threshold. Whether SEBI's grievance redressal mechanism will have enough teeth to hold index providers accountable remains the critical open question.
NationPress
12 May 2026
Frequently Asked Questions
What is SEBI's new directive on index providers?
SEBI has mandated that index providers of 'significant indices' register with it within six months under the Index Provider Regulations. The move aims to improve transparency and accountability in the governance of market benchmarks used by mutual funds.
Which indices qualify as 'significant indices' under SEBI's framework?
An index is classified as significant if the daily average cumulative AUM tracking it across mutual fund schemes exceeds ₹20,000 crore for each of the previous six months ending 30 June and 31 December each year. SEBI has identified 48 such indices based on July–December 2025 AUM data.
Are any index providers exempt from SEBI's registration requirement?
Yes. Index providers whose indices are notified by the RBI as 'significant benchmarks' or 'authorised benchmarks' are exempt from the SEBI registration requirement, given existing RBI oversight.
What is the structural separation requirement in the SEBI circular?
Any entity already registered with SEBI in another capacity — such as an exchange or rating agency — that also provides significant indices departmentally must form a separate legal entity for index provider activities within two years of the circular's date.
How does the grievance redressal mechanism work under the new rules?
The grievance redressal mechanism under SEBI's IP Regulations will apply only to significant indices provided by SEBI-registered index providers. Subscribers to such indices will have formal recourse to file grievances under this framework.
