TMI BlogSecurities and Exchange Board of India (Index Providers) Regulations, 2024.X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 2. (1) In these regulations, unless the context otherwise requires, the terms defined herein shall bear the meanings assigned to them and their cognate expressions and variations shall be construed accordingly, (a) Act means the Securities and Exchange Board of India Act, 1992 (15 of 1992); (b) Administration means all stages and processes involved in the production and dissemination of a benchmark or index, and includes (i) collecting, analyzing or processing information or expressions of opinion for the purposes of determination of a benchmark or index; (ii) determining a benchmark or index through the application of a formula or through another method of calculating the information or expressions of opinions provided for that purpose; and (iii) dissemination to subscribers, including any review, adjustment and modification to this process. (c) Audit Trail means the documentation and retention of all relevant data, submissions, other information, judgments, including the rationale for any inclusion or exclusion of data, analysis and identities of submitters of information used in the benchmark setting process for an appropriate period; (d) Benchmark or Index means prices, esti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r all stages of the Benchmark or an Index administration process, including: (i) the calculation of the Benchmark or an Index; (ii) determining and applying the Benchmark or an Index methodology; and (iii) disseminating the Benchmark or an Index. (n) Methodology means the written rules and procedures according to which information is collected and the Benchmark or an Index is determined; (o) Net-worth shall have the same meaning assigned to it under sub-section (57) of section 2 of the Companies Act, 2013 (18 of 2013); (p) Publish or make available refers to the requirement of an Index Provider to provide a document or notice to the Stakeholders where the means by which such notice is made, is proportionate to the breadth and depth of the use of Benchmark by the Stakeholders, as determined by the Index Provider on a best effort basis. Explanation: Document or notice published on the website of an Index Provider shall ordinarily be considered as compliance with this requirement; (q) Regulated Market or Exchange means a market or exchange that is regulated or supervised or both by a Regulatory Authority; (r) Regulatory Authority means a governmental or statutory body not being a Self ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtificate of registration issued by the Board Provided that an existing entity falling within the scope of these regulations and which is not registered with the Board may continue to carry on its activity for a period of six months from the date of commencement of these regulations or if it has made an application for registration under sub-regulation (2) within the said period of six months, till the disposal of such application: Provided further that Benchmarks in the financial markets regulated by the Reserve Bank of India including the Significant Benchmarks notified by the Reserve Bank of India under section 45 W of the Reserve Bank of India Act, 1934 (2 of 1934) shall be excluded from the purview of these regulations. (2) An application for the grant of a certificate under sub-regulation (1) shall be made to the Board in Form A of the First Schedule and shall be accompanied by a non refundable application fee, as specified in Part A of the Second Schedule, to be paid in the manner as specified in Part B. (3) The applicant shall file with the Board the compliance assessment report that was issued during the preceding twelve months by an independent external auditor for confir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the criteria specified in Schedule II of the Securities and Exchange Board of India (Intermediaries) Regulations, 2008: Provided that, where the promoter of an Index Provider is a stock exchange, clearing corporation or depository, the criteria for determining the fit and proper status of an Index Provider shall be as per the fit and proper criteria specified in Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018 and the Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018. Application to conform to the requirements 7 . Any application for a certificate, which is not complete in all respects or does not conform to the requirement of regulation 5 or instructions specified in Form A of the First Schedule shall be rejected by the Board: Provided that before rejecting any such application, the applicant shall be given an opportunity to remove, within thirty days of the date of receipt of the relevant communication from the Board, such objections as may be indicated by the Board: Provided further that the Board may, on sufficient reason being shown, extend the time for removal of objections by such further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation under sub-regulation (1) shall be communicated to the applicant within a period of thirty days of such decision, with grounds for not accepting the application. CHAPTER III GOVERNANCE AND CONFLICT OF INTEREST Code of Conduct 12. Every Index Provider shall abide by the Code of Conduct specified in the Third Schedule of these regulations. Governance 13. The Index Provider shall have appropriate governance arrangements in place in order to protect the integrity of the benchmark determination process, mitigate conflict of interest and segregate the persons responsible for index governance from the persons responsible for commercializing the Indices. Responsibilities 14 . (1) The Index Provider shall bear the primary responsibility for all aspects of its benchmark determination process such as the development, calculation and maintenance of an Index and establishment of credible and transparent governance, oversight and accountability procedures and the overall responsibility for the integrity of its indices regardless of the mode or manner utilized for benchmark determination. (2) An Index Provider that has developed or develops the Index or Benchmark with another entity shall e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Indices. (2) The Index Provider shall document, implement and enforce these policies and procedures for identification, disclosure, management, mitigation or avoidance of conflict of interest. (3) The Index Provider shall formulate policies that prevents personal interest or business connections from compromising or conflicting with the performance of its functions, put in place effective procedures to control the exchange of information amongst the staff engaged in the activities involving any potential risk of conflict of interest, require its employees to comply with applicable laws and regulations and that protects confidential and material non-public information: Provided that such policies shall apply to individuals responsible for any aspect of the oversight function with respect to the Indices as well as to those individuals engaged in the day-to-day governance and operations of calculating and maintaining Indices. (4) The conflict of interest policies shall clearly specify; (a) the manner in which sensitive information shall be protected; (b) processes for protection of sensitive information, wherever appropriate; and (c) trading restrictions and pre-clearance requirement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic the guidelines regarding the data inputs and the manner in which such data is used for the calculation and maintenance of an Index. (4) An Index Provider shall use inputs consistent with the approach to ensure quality, integrity and continuity of its Index calculations and maintenance as set out in the Index Methodology. (5) (a) An Index Provider may obtain submissions from across a wide universe of market segments and shall perform due diligence on its Data Submitters; (b) An Index Provider shall formulate a Code of Conduct for Data Submitters to address quality, oversight, conflict of interest management, record-keeping and whistleblowing which shall be published on website of index provider: Provided that the requirement of framing a Code of Conduct shall not be required for Indices based on transaction data of the Regulated Markets and Stock Exchanges. (6) (a) An Index Provider shall make the Methodology documents available in public to facilitate an understanding of the manner in which the Index seeks to measure the interest and the manner in which the Index is calculated and maintained. (b) The Index Provider shall put in place guidelines in cases when the Index Provider u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of an index or benchmark, shall shift to a new benchmark offered by a registered Index Provider or cease to track the Indices and take all necessary and consequential steps in this regard within a time period of three months of notice of such intent of cessation. Internal Controls over Data Collection 21 . (1) An Index Provider shall maintain internal controls to address the processes for selection of data sources and data Submitters, for data collection and for the protection of data integrity and its confidentiality. (2) The Regulated Markets and Stock Exchanges shall ensure equal, unrestricted, transparent and fair access of data to all the Index Providers who have entered into a data sharing agreement with them and shall disseminate data without any bias or preference towards its associates and related entities and ensure that there is no disparity in timing, format and manner of information dissemination. CHAPTER V ACCOUNTABILITY AND DISCLOSURES Accountability Mechanism 22. An Index Provider shall establish and make available in public, the complaint redressal policy to facilitate the submission of complaints by subscribers pertaining to whether a specific Index is represe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intimate to the Board the place within India, where all the books of account, records and documents required to be maintained under these regulations are being maintained. Compliance with guidelines, circulars issued by the Board 27. The Index Providers shall comply with such guidelines and circulars as may be issued by the Board from time to time. Website 28 . Every Index Provider shall maintain a functional website publishing such information as may be specified by the Board and an official email address. Appointment of Compliance Officer 29 . (1) Every Index Provider shall appoint a compliance officer who shall be responsible for monitoring the compliance of the Act, rules and regulations, notifications, guidelines and circulars issued by the Board. (2) The compliance officer shall immediately and independently report to the Board any non-compliance observed by him as soon as possible, but not later than seven working days from the date of such noncompliance. Submission of Information to the Board 30. (1) Where any information is called for by the Board from an Index Provider under these regulations, including any report relating to its activities, the Index Provider shall furn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nge Board of India (Intermediaries) Regulations, 2008. CHAPTER VII ACTION IN CASE OF DEFAULT 36. An Index Provider who contravenes any of the provisions of the Act, Rules, or Regulations framed thereunder shall be liable for action under the Securities and Exchange Board of India (Intermediaries) Regulations, 2008 or the relevant provisions of the Act and the regulations made thereunder. CHAPTER VIII MISCELLANEOUS Exemption from strict enforcement. 37 . (1) The Board may suo motu or on an application made by an Index Provider, for reasons recorded in writing, grant relaxation from the strict enforcement of any of the provisions of these regulations, subject to such conditions as the Board deems fit to impose in the interests of investors and the securities market and for the development of the securities market, if the Board is satisfied that: (a) the requirement is procedural in nature; or (b) the non-compliance is caused due to factors beyond the control of the entity; (2) The application referred to under sub-regulation (1) shall be accompanied by a non-refundable fee of rupees fifty thousand only payable by way of direct credit in the bank account through NEFT/ RTGS/ IMPS or on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Y PERSONNEL 3.1 Particulars of Directors of the company, which shall include name, qualification, experience, shareholding in the company and directorship in other companies. 3.2 Particulars of Key Personnel of the company, which shall include the name, designation in the company, qualification, previous positions held, experience, date of appointment in the company and functional areas. 4.0 INFRASTRUCTURE 4.1 Details of infrastructure including computing facilities, facilities for research and database available with the company and whether the existing infrastructure is adequate Any further plan for additional/ improved infrastructure to be indicated. 5.0 MAJOR SHAREHOLDERS 5.1 List of major shareholders (holding 5% and above of applicant directly or along with associates) Shareholding as on: . Name of shareholder No. of Shares held % age of total paid up capital of the company 6.0 ASSOCIATE CONCERNS 6.1 Particulars of associate companies/concerns which shall include name, address, type of activity handled, nature of interest of the Applicant company in the associate, nature of interest of promoter(s) of the applicant in the associate. 6.2 Whether the Board has granted/ refused r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tigations against the applicant company, directors and employees: Nature of dispute Name of the party Status 10.2 Indictment or involvement in any fraud or economic offences by the applicant or any of its Directors or Key Managerial Personnel, in the last three years. 11.0 DECLARATION 11.1 Give the following declarations signed by two directors: I/We hereby apply for registration. I/We warrant that I/We have truthfully and fully answered the questions above and provided all the information which might reasonably be considered relevant for the purposes of my registration. I/We declare that the information supplied in the application form is complete and correct. For and on behalf of _________________________________________________________________________ (Name of Applicant) _________________________________________________________________________ Director Director Enclosure: 1. Certificate of registration/ incorporation 2. Detailed recent report on adherence to International Organization of Securities Commissions Principles of Financial Benchmarks where compliance assessment is carried out by independent audit conducted by external professional FORM B SECURITIES AND EXCHANGE BOARD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... due diligence, ensure proper care and exercise independent professional judgement in order to achieve and maintain objectivity and independence in the Index or Benchmark determination process. 4. An Index Provider shall have a reasonable and adequate basis for performing Index administration, with the support of appropriate and in depth research. It shall also maintain records to support its decisions. 5. An Index Provider shall have in place an administration process consistent with international standards to International Organization of Securities Commissions Principles. 6. An Index Provider shall keep track of all important changes in the market affecting the computation of Index and shall develop efficient and responsive systems to yield timely and accurate Index values. 7. An Index Provider shall disclose its methodology to their clients, users and the t public. 8. An Index Provider shall, wherever necessary, disclose to the clients, possible sources of conflict of duties and interests, which could impair its ability to make a fair, objective and unbiased determination of Indices or Benchmarks. Further it shall ensure that no conflict of interest exists between any member of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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