Regulating global index providers may put MFs in a spot, fear experts

Under the proposed norms, overseas index providers investing in global assets will also be required to comply if they have users in India

The Securities and Exchange Board of India’s (Sebi's) proposed regulatory framework for Index Providers could put domestic mutual funds investing overseas in a spot. Asset managers offering passive products benchmarked to overseas indices may be forced to sever ties with index providers unwilling to comply with local regulations, fear industry experts.

Even if the overseas index providers invest only in global assets but have users in India, which means, if the index is tracked by any mutual fund (MF) scheme, then the proposed rules will apply to them. Many passive MFS in India invest abroad and have these global indices