Regulatory framework for Index providers

Why in news?

• 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 recognized 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.

 

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Q1) What is the function of IOSCO?

IOSCO develops, implements and promotes adherence to internationally recognized standards for securities regulation.

Source: Sebi proposes regulatory framework for index providers