SEBI Proposes ₹20,000 Crore AUM Threshold for Regulation of Market Indices

The Securities and Exchange Board of India (SEBI) has proposed a financial threshold to determine which market indices will fall under its regulatory oversight. SEBI said that the move is aimed at enhancing transparency, accountability, and governance in the administration of market indices.

In a consultation paper released on Monday, the regulator said any index tracked or used as a benchmark by domestic mutual fund schemes with cumulative assets under management (AUM) exceeding ₹20,000 crore will be designated a “significant index” and governed by the Index Provider Regulations introduced in 2024. 

Methodology for Computing Cumulative AUM

Under the proposed framework, cumulative AUM will be calculated using the daily average AUM of domestic mutual fund schemes for each month over the preceding six months. The assessment will be conducted twice a year, with reference dates of 30 June and 31 December. 

If a mutual fund scheme tracks more than one index or benchmark, only the portion of AUM attributable to each index will be considered. In the case of composite products or indices of indices, AUM linked to the underlying indices will be apportioned based on their respective weights.

Identification of Significant Indices

SEBI said the proposed threshold and calculation methodology were finalised following internal deliberations and consultations with the Association of Mutual Funds in India (Amfi). Applying this approach to mutual fund AUM data for the period from 1 January to 30 June 2025, the regulator identified 47 “significant indices” across equity, debt, and hybrid categories. 

These indices are administered by BSE Index Services, NSE Indices, and CRISIL, and include widely tracked benchmarks such as the BSE Sensex, Nifty 50, Nifty Bank, Nifty 500, and BSE 500, along with several sectoral, duration-based, and money market indices.

Also Read: SEBI’s New Rules for Mutual Funds to Be Effective from April 1, 2026: Major Shift in Expense Ratio

Registration Requirement and Regulatory Exemptions

Under the draft circular, index providers administering significant indices will be required to apply for registration with SEBI within six months of the circular being issued. However, this requirement will not apply to index providers whose significant indices are regulated by the Reserve Bank of India (RBI), including benchmarks notified by the central bank.

Grievance Redressal and Public Feedback

SEBI clarified that the grievance redressal mechanism under the Index Provider Regulations will apply only to significant indices offered by SEBI-registered index providers, and subscribers to such indices will be able to seek redressal under the SEBI framework. The regulator has invited public comments on the consultation paper until 10 February 2026.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.