The Securities and Exchange Board of India (Sebi) on Wednesday proposed new norms to regulate index providers, entities who design and develop benchmark indices such as the Sensex and Nifty. The index operators, which include subsidiaries of stock exchanges and independent entities such as S&P, currently do not come under Sebi’s direct regulatory purview.
The proposed norms include a code of conduct for index operators, while mandating more disclosures and greater transparency when including or excluding a stock from the indices.
Besides, the proposed measures would address issues like avoiding conflict of interest, creation of a robust audit mechanism and a whistle-blower framework to facilitate early detection of potential misconduct. These suggestions are in line with the International Organisation of Securities Commissions principles, which are globally accepted standards for index providers.