Recently, the Securities and Exchange of India proposed a framework for index providers to improve transparency and accountability in the domestic securities market.
- The index provider shall be a legal entity incorporated under the Companies Act in the country of origin and should have a minimum net worth of Rs 25 crore.
- The proposed regulation shall apply to index providers of both domestic and foreign.
- The index providers must be assessed by independent external auditors to evaluate adherence to International Organization of Securities Commissions (IOSCO) principles once in two years.
What is IOSCO?
- Established in 1983, it is the international body that brings together the world’s securities regulators and is recognised as the global standard-setter for the securities sector.
- It works intensively with the G20 and the Financial Stability Board (FSB) on the global regulatory reform agenda.
- There are three categories of members — Ordinary, Associate and Affiliate.
- Recently, the International Financial Services Centres Authority (IFSCA) has become an associate member of this organisation.