The ceiling set at twice the average of the index, would mean that the weight of China, the largest contributor to the benchmark, would be cut to 20.5 percent in the JACI Diversified from 40.2 percent in the existing JACI.

"The issuance trends since 2012 has disproportionately increased the weight of China in the existing JACI index leading to large concentration risks in the benchmark," said a JPMorgan spokesman referring to the index which is tracked by managers controlling $35 billion to $45 billion in assets.

"The spirit of the JACI Diversified is to effectively represent Asian credit markets while limiting concentration to a given country."

The Philippines on the other hand would see its weightage rise to 12.03 percent from 7.21 percent in the old index.

Sovereign issuers would comprise a higher proportion of the new index at 20 percent versus 14 percent in the old benchmark, while the property sector, a large source of bond supplies in recent years, would see its contribution drop to 9.36 percent from 12.61 percent.

The JACI Diversified benchmark shares the inclusion criteria and composition of the widely followed JACI <.JPMACI>, with both indexes returning 6.8 percent since inception, the investment bank said in a report.

(Reporting by Umesh Desai; Editing by Jacqueline Wong)