SEBI approves rules for index providers (GS Paper 3, Economy)
Why in news?
- Recently, the board of the Securities & Exchange Board of India (SEBI) approved a regulatory framework for Index Providers with the objective of fostering transparency and accountability in governance and administration of financial benchmarks in the securities market.
Significant Indices:
- The regulations will provide a framework for registration of Index Providers which license ‘Significant Indices’ that shall be notified by SEBI based on objective criteria.
- The regulatory framework which is in accordance with IOSCO Principles for Financial Benchmarks will now only be applicable to ‘Significant Indices’.
Alternative Investment Funds (AIFs):
- Further, in order to facilitate ease of compliance and to strengthen investor protection in Alternative Investment Funds (AIFs), SEBI stipulated that any fresh investment made by an AIF beyond September 2024 would be held in dematerialised form.
- AIFs may now appoint a custodian who is an associate or manager or sponsor of the AIF, subject to conditions similar to those prescribed under SEBI (Mutual Funds) Regulations, 1996 for permitting related party of sponsor of a Mutual Fund to act as its custodian.
Other Highlights:
- The Board also noted that the cost of compliance to the schemes coming under the said mandate was an average of approximately ₹88,000 per annum for availing custodial services.
- The Board also approved amendments to SEBI (Real Estate Investment Trusts) Regulations, 2014 to create a regulatory framework for facilitation of Small & Medium REITs (SM REITs), with an asset value of at least ₹50 crore vis-à-vis minimum asset value of ₹500 crore for existing REITs.
- SM REITs will have the ability to create separate scheme(s) for owning real estate assets through special purpose vehicle(s) constituted as companies.
- The board also approved flexibility in the framework for Social Stock Exchange (SSE) to provide impetus to fundraising by Not for Profit Organisations (NPOs) on the Social Stock Exchange.
- The board approved changing the nomenclature of “Social Auditor” with “Social Impact Assessor” to provide comfort to NPOs and convey a positive approach towards the social sector.
Mandatory blending of Compressed Bio-Gas in CNG (Transport) & PNG (Domestic) segments of CGD Sector
(GS Paper 3, Economy)
Why in news?
- CBG Blending Obligation (CBO) will promote production and consumption of Compressed Bio-Gas (CBG) in the country.
- The National Biofuels Coordination Committee (NBCC), recently announced the introduction of phase wise mandatory blending of CBG in CNG (Transport) & PNG (Domestic) segments of CGD sector.
Objectives:
- The key objectives of the CBO are to stimulate demand for CBG in CGD sector, import substitution for Liquefied Natural Gas (LNG), saving in Forex, promoting circular economy and to assist in achieving the target of net zero emission etc.
- It will encourage investment of around Rs. 37500 crores and facilitate establishment of 750 CBG projects by 2028-29.
It was, inter-alia, decided that:
- CBO will be voluntary till FY 2024-2025 and mandatory blending obligation would start from FY 2025-26.
- CBO shall be kept as 1%, 3% and 4% of total CNG/PNG consumption for FY 2025-26, 2026- 27 and 2027-28 respectively. From 2028-29 onwards CBO will be 5%.
- A Central Repository Body (CRB) shall monitor and implement the blending mandate based on the operational guidelines approved by Minister, PNG.
Promoting biofuels:
- Sustainable Aviation Fuel (SAF/Bio- ATF) initial indicative blending percentage targets were set by the committee.
- Based on the comments received from the stakeholders, like MoCA, Niti Aayog, OMCs, etc., the capacities of Sustainable Aviation Fuel plants coming up in the country and projected ATF sales, the following initial indicative blending percentages of SAF in ATF are approved:
- 1% SAF indicative blending target in 2027 ( Initially for International flights)
- 2% SAF blending target in 2028 (Initially for International flights )
