The article speaks about how Index providers in India will now come under the purview of SEBI. On May 31, 2017, SEBI came out with a draft discussion paper on a Code of Conduct for Index Providers.
An Index is a metric that tracks the performance of a select group of stocks. For example, SENSEX is an Index which represents 30 well established large Indian companies from various sectors and is based on the ‘free-float market capitalization-weighted’ method as criteria to select the companies.
The Index providers will now have to strictly comply with the Code of Conduct as set out by SEBI.
Will this impact in any way for who trade index futures and options? Like liquidity o volatility?
It should not impact traders of Index Futures & Options in any way. The providers of Index Futures & Options will have to take more caution to comply with all the new SEBI requirements. Having a set Code of Conduct will increase transparency among the providers of Index Futures & Options, which would prove beneficial for traders in general.