Sebi Sets New Guidelines for Derivatives on Non-Benchmark Indices

The Securities and Exchange Board of India (Sebi) has issued guidelines for stock exchanges regarding derivatives on non-benchmark indices like Bankex and FinNifty. These guidelines include adjustments to index compositions and weights to improve market efficiency and representation, with a compliance deadline by March 2026.

The Securities and Exchange Board of India (Sebi) has introduced new guidelines for stock exchanges concerning derivatives on non-benchmark indices, including Bankex and FinNifty.

These guidelines mandate modifications to the composition and weighting of these indices, to be implemented in phases by March 2026. This move aims to enhance market efficiency and broaden trading opportunities.

Stock exchanges must adhere to specific prudential norms, which involve certain conditions for index constituents to qualify for derivatives trading.

(With inputs from agencies.)