Various regulatory bodies and other organizations have turned their attention to the provision and use of benchmarks. MSCI has been actively monitoring these developments and engaging in dialogue with the relevant parties.
MSCI Oversight and Governance Committees
MSCI provides overall oversight and governance for its indexes through a committee structure. Each of these committees has a Terms of Reference:
MSCI real estate indexes
MSCI indexes and MSCI real estate indexes
How MSCI Manages Conflicts of Interest
Please see our statement here.
MSCI has been committed to high standards in benchmark administration long before the EU benchmark regulation, as evidenced through our adoption of the IOSCO Principles for Financial Benchmarks (described below) and our long history as a respected benchmark provider. We fully support the aims of the EU benchmark regulation and have been an active contributor to its development from the outset.
Below you can find updates about our applications for authorization to become a regulated benchmark administrator in the EU.
Equity indexes: On 5 March 2018, MSCI Limited (located and registered at Ten Bishops Square, 9th Floor, London E1 6EG, UK) was granted authorization by the UK FCA as a UK administrator for all of our MSCI equity indexes. MSCI Limited is listed on the FCA’s register and on the ESMA register for administrators. Additional information about the indexes covered by our authorization can be found here and the benchmark statements can be found here and here respectively.
Real estate indexes:
Under IOSCO, Investment Property Databank Limited (located and registered at Ten Bishops Square, 9th Floor, London E1 6EG, UK) is currently the administrator for all of our fund-based and asset-based real estate indexes (including PAS benchmarks).
Further to the recent consultation on the EU benchmark regulation (“BMR”) and its impact on transparency in the real estate investment market, MSCI has decided to apply in the EU as the benchmark administrator for the following MSCI asset-based and fund-based real estate indexes only*:
- the AREF/IPD UK Quarterly Property Fund Index,
- the IPD UK Annual Property Index,
- the IPD UK Quarterly Property Index,
- indexes and benchmarks created from the same index universes as the indexes above that a licensed client requests for a BMR regulated use (such use subject to MSCI’s approval in each instance). This includes those used for financial instruments.
MSCI will not allow BMR regulated use of any other MSCI real estate indexes.
MSCI will be establishing a new and separate approval process whereby all BMR regulated uses will need to be registered with MSCI and separately authorized and approved in each instance by MSCI in its discretion, in writing. Usage of any indexes for BMR regulated uses outside this approval process will be strictly prohibited.
MSCI will be providing information in due course about this new process as well as details on the MSCI administrator for these indexes, the anticipated regulatory application timetable, and any changes required as it prepares its application as an EU administrator.
The announcement of the conclusion to MSCI’s consultation on EU benchmark regulation in relation to the MSCI asset-based and fund-based real estate indexes can be found here
* For the period from January 1, 2018 until we are authorized, we intend to use the transitional period afforded to EU administrators under Article 51(1) (and Article 51(5) in the event of a hard Brexit) of the EU benchmark regulation, which permits the use of our existing and new indexes in the EU (as clarified by ESMA’s guidance from July 5, 2017 (and November 8, 2017)) for up to two years.
Should you have any questions, please contact MSCI Client Service.
MSCI has a long history of defining and adopting best practice with respect to its index policies and procedures, and we support the aims of the IOSCO Principles for Financial Benchmarks.
The International Organization of Securities Commissions (IOSCO) is an association of organisations that regulate the world’s securities and futures markets. In order to promote transparency, IOSCO published some principles for financial benchmarks in July 2013, calling upon benchmark administrators to disclose their compliance within 12 months of that date.
MSCI has engaged PricewaterhouseCoopers LLP to undertake an independent reasonable assurance review of MSCI's implementation of the IOSCO Principles for Financial Benchmarks. Reasonable assurance is a higher level of assurance than limited assurance, and copies of the assurance reports can be viewed below:
IOSCO Compliance Statement and Assurance Report - MSCI Equity Indexes
IOSCO Compliance Statement and Assurance Report - MSCI's IPD Indexes and Benchmarks
Data submitters to IPD indexes
We ask data submitters to adhere to our Data Submitter Code of Conduct so that the data submission processes for assets included in the IPD indexes and benchmarks are in line with the IOSCO Principles and best practices.
For further information and if you provide data to us, please read the documents below:
MSCI Equity Index Policy regarding United States Irs 871(M) regulations relating to the definition of a “Qualified Index”
While we strive to provide quality products and services, if you have a formal index complaint regarding our index products, please follow the procedure as outlined below. Formal index complaints include complaints regarding whether a specific index appropriately represents the market, segment or strategy it seeks to measure, complaints regarding a proposed change to the index determination process, complaints regarding an application of the methodology in relation to a specific index determination, and complaints regarding other decisions in relation to the index determination process.
Formal index complaints relating to our equity indexes or real estate indexes must be submitted through the web form found here.
MSCI’s formal index complaints policy can be found here. For the avoidance of doubt, this process covers formal index complaints only. For general questions about our equity indexes, please contact MSCI Client Service. For general questions about our real estate indexes, please contact the IPD Client Services team via firstname.lastname@example.org.