Sebi proposes a threshold of Rs 20,000 crore to consider a benchmark as ‘significant indices’

Markets regulator Securities and Exchange Board of India (Sebi) has proposed an assets under management (AUM) threshold of Rs 20,000 crore for a benchmark or index to be considered ‘significant indices’.This move follows internal deliberations and discussions with the Association of Mutual Funds in India (AMFI) with a view to promoting transparency and accountability in the governance and management of securities market indices.

The cumulative AUM for this purpose will be calculated based on the daily average of AUM of domestic mutual funds for each month of the last six months ending June 30 and December 31 of each year, the regulator proposed in a consultation paper issued on Monday.The significant indices under the Regulation were defined as those managed by an index provider and tracked or benchmarked by domestic mutual funds, where the cumulative assets under management exceed such limits as may be specified from time to time.

Sebi has notified the regulatory framework for index providers in the securities market through the SEBI (Index Provider) Regulations, 2024.

“In terms of Regulation 3(1), the Regulations apply only to Index Providers who manage Significant Indices consisting of securities listed on a recognized stock exchange in India for use in the Indian securities market,” the consultation document said.

If an investment fund tracks more than one index or benchmark, the cumulative AUM for each index is calculated by including only the portion of the fund’s AUM linked to that specific index or benchmark, the consultation document said. In the case of an index of indices, the cumulative AUM tracking such underlying indices would also include the AUM tracking such indices in proportion to their respective weights, the document added.

The providers of the ‘Significant Indices’ will be required to apply for registration as an Index Provider within a period of six months from the date of issuance of this circular, in accordance with Regulation 4 of the SEBI (Index Providers) Regulations, 2024.

“This requirement shall not apply to the providers, if all their significant indices are regulated by the Reserve Bank of India, including the significant benchmarks notified by the Reserve Bank of India under section 45W of the Reserve Bank of India Act, 1934 (2 of 1934),” it said.

Sebi has set the last date for sending feedback as February 10, 2026.

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