SEBI Brings Index Providers Under Direct Regulation: “Significant Indices” and the 5 November 2026 Registration Deadline

[SEBI Circular No. HO/47/17/12(8)2025-MRD-POD2 dated 5 May 2026]

Introduction

Indices have quietly become central to passive investing in India. When an investor buys an index fund or an exchange traded fund, the money follows a benchmark such as the Nifty 50 or the Sensex, and the entity that designs, calculates and maintains that benchmark effectively decides what the fund holds. Until recently, the entities doing this work, known as index providers, sat outside any dedicated securities law framework, even though large sums of retail money depend on their methodology and discretion.

To close this gap, the Securities and Exchange Board of India (SEBI) notified the SEBI (Index Providers) Regulations, 2024 (IP Regulations), with the stated objective of fostering transparency and accountability in the governance and administration of indices. The IP Regulations apply only to index providers that administer Significant Indices, which are indices tracked or benchmarked by domestic mutual fund schemes whose cumulative assets exceed limits that SEBI may specify. Those limits and the first list of indices remained to be specified. SEBI has now done so through a circular dated 5 May 2026, which starts a six-month registration window that closes on 5 November 2026.

Background: The Circular

The circular is addressed to all index providers, stock exchanges, mutual funds, asset management companies and the Association of Mutual Funds in India. It is issued under Section 11(1) of the Securities and Exchange Board of India Act, 1992 read with Regulation 38 and Regulation 2(1)(u) of the IP Regulations (para 12), and it came into force with immediate effect (para 11). Regulation 3(1) confines the IP Regulations to providers of Significant Indices made up of securities listed on a recognised stock exchange in India and meant for use in the Indian securities market, which is why the definition of a Significant Index decides who is regulated (paras 2 and 3).

Explanation

The circular first fixes the test. A benchmark or index based on listed securities, including an index of indices, is a Significant Index if the daily average cumulative assets under management (AUM) tracking or benchmarking it across mutual fund schemes exceeds Rs. 20,000 crore for each of the past six months ending on 30 June and 31 December each year (para 4). The status is also sticky. An index that is on the list stays on it unless its tracked AUM falls short of the threshold for a continuous period of three years, that is, six consecutive half yearly reviews (para 5). A single weak half year will therefore not take an index out of the regime.

Two features of the test deserve attention. First, read with Regulation 2(1)(u) and paragraph 5, which refer to indices “tracked or benchmarked”, the test appears to count schemes that merely benchmark an index as well as those that replicate it, so an index used as a yardstick by actively managed funds could cross the threshold even when no passive fund tracks it. Paragraph 4 itself speaks only of AUM “tracking” an index, and the circular does not explain how benchmark-linked AUM is to be measured, so providers in a borderline position should seek clarification from SEBI. Second, the figure is measured across all mutual fund schemes together, so it ties regulation to the amount of investor money exposed to an index, and not to its age, prestige or number of subscribers.

Applying this test to AUM data for the period from 1 July 2025 to 31 December 2025, SEBI has listed 48 Significant Indices in Annexure A (para 6). Nine are administered by BSE Index Services Pvt. Ltd., including the Sensex, the BSE 100, 200 and 500 and the BSE Healthcare index. Eight are administered by CRISIL: six debt, liquid and money market indices and two hybrid indices. The remaining 31 belong to NSE Indices Limited and include the Nifty 50, Nifty Bank, Nifty 500 and Nifty Next 50, along with a large group of debt, money market, hybrid and arbitrage indices. The list shows that the regime reaches well beyond headline equity benchmarks into the debt and money market space.

The registration obligation follows. Every index provider providing any Significant Index in Annexure A must apply to SEBI for registration under Regulation 4 of the IP Regulations within six months of the circular, which means by 5 November 2026 (para 7). The requirement does not apply to a provider if every Significant Index it provides is either notified by the Reserve Bank of India as a Significant Benchmark or classified by the RBI as an Authorized Benchmark under the relevant directions issued under Section 45W of the Reserve Bank of India Act, 1934. The footnote to Annexure A adds that any listed index so notified or classified is excluded from the purview of the IP Regulations. Providers that already offer Significant Indices on the date of the circular may continue their index provider activity, provided they file within the six-month window (para 8). The circular does not say expressly what happens after a timely application is filed and before SEBI decides it.

The circular also addresses the organisational structure of providers conflicts of structure. If an entity registered with SEBI in some other capacity provides Significant Indices by carrying on index activity as a department of its own business, it must set up a separate legal entity for the index provider activity within two years of the circular, that is, by 5 May 2028 (para 9). The likely purpose, although the circular does not state it, is that the administration of a benchmark should not sit inside a business that may have its own commercial interest in how the benchmark moves.

Finally, the circular clarifies that the grievance redressal mechanism under Regulation 23 of the IP Regulations applies only to Significant Indices provided by index providers registered with SEBI (para 10). Subscribers to such indices will have recourse under the IP Regulations, but only where the provider is registered, which gives providers a practical reason to complete registration without delay.

Conclusion

The circular turns a framework that existed on paper into a working regime. For index providers, the immediate task is to finalise and file registration applications by 5 November 2026, and, for those that run index activity inside another regulated entity, to begin planning the move to a separate legal entity well before 5 May 2028 deadline. Providers whose Significant Indices have been notified by the Reserve Bank of India as Significant Benchmarks or classified by it as Authorized Benchmarks should confirm in writing that every Significant Index they provide falls within the exemption, since the exemption from registration applies only when all of them qualify.

Asset management companies, including those managing index funds and exchange traded funds, should also act. They should map which of their schemes track or benchmark any of the 48 listed indices, confirm the registration status of each provider, and review licensing and data agreements to see whether they address regulatory change, grievance routes and continuity if a provider fails to register. One open question is how and when providers of indices that enter the list at later half-yearly reviews must register, since the circular sets the six-month window only for indices in the first list. Market participants should watch for further guidance, and for the effect of this regime on the cost and conduct of passive investing in India.

Last Updated on 30 October, 2026