The index operators, which include subsidiaries of stock exchanges and independent entities such as S&P, currently do not come under Sebi's direct regulatory purview and the new norms would also include a 'code of conduct' for them while mandating more disclosures and greater transparency while including or excluding a stock from the indices.

"The broader equity indices traded at Indian stock exchanges are owned and managed by separate legal entities or subsidiary of stock exchanges. As a result, these entities do not come under the purview of any specific regulation or ambit of regulations," a senior official said.

"Therefore calculation, maintenance and management of Indices are carried out at the discretion of Index providers and no regulatory oversight is presently available," he added.

Accordingly, Sebi has decided to put in place a regulatory framework for the index providers and their activities.

Among others, the major indices on the NSE are managed by India Index Services and Product Ltd (IISL), a NSE group company, which maintains over 80 equity indices comprising broad-based benchmark indices, sector indices and customised indices. Earlier, rating agency Crisil had a stake in IISL, which it exited in 2013.

At the BSE, the major indices, including Sensex, are managed by Asia Index Pvt Ltd, a 50-50 partnership between the exchange and S&P Dow Jones Indices LLC, the world's largest provider of financial market indices.

According to Sebi's proposal, the new regulation would include "a code of conduct for Index Providers in order to mitigate concerns of misuse of information associated with rebalancing/reconstitution of Indices".

Besides, it would provide for greater level of disclosure and transparency regarding stocks moving on and out of indices.

Also, the new norms would require a broad framework to be followed by Index Providers while managing/maintaining Indices and licensing indices or products based on indices in foreign jurisdictions.