Summary of this article
Sebi sets Rs 20,000 crore AUM rule to define “significant indices” tracked by mutual funds
48 indices identified; removal happens only after six consecutive failed reviews
Index providers must register; RBI benchmarks exempted, complaints allowed only against registered ones
The Securities and Exchange Board of India (Sebi) operationalised a key part of its Index Providers Regulations, 2024 by specifying what qualifies as a “significant index” and publishing an initial list of such indices, tightening oversight of benchmarks widely tracked by mutual funds.
According to the circular dated May 5, a benchmark or index, including an index of indices, based on listed securities will be called a “significant index” if the average assets under management (AUM) of mutual fund schemes tracking it is more than Rs 20,000 crore for each of the past six months, with the review conducted every six months, ending June 30 and December 31.
The regulator clarified that the Index Providers Regulations apply only to those indices that have meaningful participation from domestic mutual funds.
The regulations state, “These regulations shall be applicable only to Index Providers that administer Significant Indices consisting of securities listed on a recognised stock exchange in India for use in the Indian securities market.”
48 Significant Indices Identified
Sebi identified 48 “significant indices” based on mutual fund investments between July and December 2025. These include popular indices like Nifty 50, Nifty 100, Nifty 200, Nifty 500, and BSE’s Sensex, BSE 100, BSE 200 and BSE 500. The list also has sector-based indices such as Nifty Bank, BSE Healthcare and Nifty Infrastructure, along with some debt and hybrid indices from NSE and CRISIL. These indices are widely used as benchmarks and play a key role in India’s passive investment market.
Six Misses in a Row to Lose ‘Significant’ Tag
Sebi introduced a mechanism to keep the list of “significant indices” stable and avoid frequent changes. Once an index is classified as significant, it will continue to remain on the list unless its mutual fund AUM consistently falls below the required threshold for a long period.
The regulator said: “An Index… shall continue to remain in the list… unless the value of cumulative AUM… does not meet the specified threshold for a continuous period of three years.”
Sebi will review this twice a year, at the end of June and December. This means an index has to fall short across six consecutive review periods before it is dropped.
Mandatory Registration for Index Providers
The regulator has asked all index providers offering “significant indices” to apply for registration within six months. Existing players can continue their operations during this period, as long as they submit their application on time.
However, entities already regulated by Sebi in another capacity must spin off index operations into a separate legal entity within two years, ensuring clearer governance and avoiding conflicts of interest.
RBI-Regulated Benchmarks Exempted
Sebi has given an exemption to indices that are already regulated by the Reserve Bank of India (RBI). This means such index providers will not need to register with Sebi if their indices are either notified as “Significant Benchmarks” or classified as “Authorized Benchmarks” by the RBI. The move helps avoid overlapping rules and keeps regulation clear between the two authorities.
Grievance Redressal Only for Registered Providers
Sebi’s move part of its broader effort to bring transparency, accountability, and standardisation to index administration, especially as passive investing continues to grow in India.
The regulator has also clarified that its grievance redressal system will apply only to registered providers of significant indices. This means investors using these indices can raise complaints under Sebi’s rules, but only if the index provider is registered.
Frequently Asked Questions
1. What is a “significant index” as per Sebi?
A “significant index” is a benchmark tracked by mutual funds with average AUM above Rs 20,000 crore over the past six months. Sebi reviews this data twice a year to decide which indices qualify.
2. How many indices has Sebi identified and can they be removed?
Sebi has identified 48 significant indices, including Nifty and Sensex-based benchmarks. An index will be removed only if it fails to meet the AUM threshold for three straight years, or six review periods.
3. What rules apply to index providers under this framework?
Index providers offering significant indices must register with Sebi within six months. However, those already regulated by RBI may be exempt, and only registered providers will fall under Sebi’s grievance redressal system.
