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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.
Index Governance, Policies and Procedures
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 equity, blended and fixed income indexes
MSCI private real estate indexes
How MSCI Manages Conflicts of Interest
Please see our statement here.
MSCI Real Estate Data Provider Code of Conduct
Data providers to MSCI Private Real Estate Indexes must adhere to our Data Provider Code of Conduct: MSCI Real Estate Data Provider Code of Conduct.
MSCI has been committed to high standards in benchmark administration long before the EU benchmark regulation was enacted, as evidenced through our long history as a respected benchmark provider and our adoption of the IOSCO Principles for Financial Benchmarks (described below). We fully support the aims of the EU and UK benchmark regulation and have been an active contributor to the development of the benchmark regulation from the outset.
Below you can find information about MSCI’s status as a regulated benchmark administrator under the UK benchmark regulation (“UK BMR”) and EU benchmark regulation (“EU BMR”). For a quick start guide to navigate to MSCI regulatory related links and information, including MSCI benchmark regulation related links, please see our Navigator.
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’s Financial Conduct Authority (“FCA”) as a UK benchmark administrator. Initially, the authorization covered MSCI equity and blended indexes. On 13 June 2019, MSCI notified the FCA in relation to specific UK MSCI Private Real Estate Indexes used as regulated benchmarks under the BMR. On 16 December 2019, MSCI notified the FCA in relation to the MSCI fixed income indexes.
MSCI Limited is listed on the FCA Financial Services Register. The list of MSCI indexes covered by MSCI’s authorization with the UK’s Financial Conduct Authority (“FCA”) as a UK benchmark administrator can be found as described below.
For information on MSCI Limited’s authorization with the FCA, MSCI’s benchmark families and benchmark statements, relevant compliance statements and the indexes covered by MSCI’s authorization, please see:
- Information related to MSCI Limited's authorization
- Benchmark Statements
- MSCI equity benchmark family - benchmark statement
- MSCI blended benchmark family - benchmark statement
- MSCI fixed income family - benchmark statement
- MSCI property benchmark family - benchmark statement
- MSCI property fund (with published NAVs) benchmark family - benchmark statement
- MSCI Real Estate - BMR Benchmarks Methodology Specifications
- ESG Disclosures
- The ESG disclosures for indexes are provided as per the amended EU BMR (based on the Commission Delegated Regulation (EU) 2020/1816 of 17 July 2020) and the UK BMR.
- ESG factors in the benchmark statement are available through the MSCI Index Profile Tool for all of the MSCI Indexes in the MSCI equity benchmark family, MSCI blended benchmark family and MSCI fixed income benchmark family.
- ESG factors in the methodology can be accessed together with the methodology documents governing a specific MSCI Index for the MSCI equity benchmark family, MSCI blended benchmark family and MSCI fixed income benchmark family.
- List of Benchmarks
- The list of MSCI indexes in the MSCI equity benchmark family and MSCI blended benchmark family are available to clients on MSCI’s client support site.
- The list of MSCI Private Real Estate Indexes in the MSCI property benchmark family and the MSCI Property fund (with published NAV) benchmark family can be found in the “MSCI Real Estate – BMR Benchmarks Methodology Specifications” above.
All non-EU benchmarks are permitted to be used in the EU until the end of the EU BMR transitional period, currently 31 December 2023. During this time, MSCI will execute on its post Brexit plans well in advance of the deadline.
- ESMA Register
Prior to the expiration of the Brexit transition period on December 31, 2020, MSCI Limited was found on both the FCA’s register and on ESMA’s register for benchmark administrators. Pursuant to ESMA's notice on 9 March 2021, as of the date of the expiration of the Brexit transition period, UK administrators (including MSCI Limited) have been removed from the ESMA register and become third country administrators in the EU. However, during the EU BMR transitional period (as defined in EU BMR Article 51) EU supervised entities can use third country benchmarks even if they are not included in the ESMA register. This EU BMR transitional period for all non-EU administrators continues until 31 December 2023. Non-EU administrators will need to be permissioned into the EU under the EU BMR from 1 January 2024. The EU BMR transitional period will allow MSCI to execute its Brexit plans. This does not affect MSCI’s authorization with the UK FCA as a UK administrator, and MSCI will continue to appear on the UK Financial Services Register.
- MSCI’s status under the UK and EU benchmark regulation
MSCI Limited’s status is as follows:
- Prior to 1 January 2021, MSCI Limited was an EU regulated benchmark administrator authorized under Article 34 of the EU BMR by the UK FCA and on the ESMA register per Article 36 of the BMR
- As of 1 January 2021, MSCI Limited is and remains authorized as a UK benchmark administrator regulated by the UK FCA (and can be found on the FCA Financial Services Register), but will be considered a “third country” UK administrator vis-a-vis the EU and will not appear on the ESMA register per Article 36 of the EU BMR unless and until the EU grants the UK “equivalence” or until MSCI is granted “endorsement” or “recognition”
MSCI Private Real Estate Indexes – Permissioning process for UK BMR and EU BMR regulated uses
Because contributors to MSCI Private Real Estate Indexes may be supervised contributors and regulated directly under the UK BMR and EU BMR, MSCI requires that all UK BMR and EU BMR regulated uses of MSCI Private Real Estate Indexes are expressly permissioned by MSCI through the formal process explained below. MSCI has also restricted potential UK BMR and EU BMR regulated use to the Total Return, Income Return and Capital Growth measures as well as Index Weights for the following indexes in the UK market:
- the MSCI/AREF UK Quarterly Property Fund Index
- the MSCI UK Annual Property Index
- the MSCI UK Quarterly Property Index
- the indexes with frozen history created from the same index universes as the indexes above that a licensed client requests for a UK BMR and EU BMR regulated use (such use subject to MSCI’s permission in each instance).
To apply for permission, MSCI clients are required to download the MSCI Private Real Estate Index Application for EU BMR Regulated Use form and send the completed form to MSCI_RealEstate_EUBMR_Use_Application@msci.com. If, after reviewing the application, MSCI approves the MSCI Private Real Estate Index for a UK BMR and EU BMR regulated use, the MSCI client will be required to sign the permission letter. MSCI will not accept, or reply to, any requests from parties that are not MSCI clients for the relevant MSCI Private Real Estate Indexes.
Use of any MSCI Private Real Assets Indexes, including any MSCI Private Real Estate Indexes, for UK BMR or EU BMR regulated uses outside this MSCI permission process is strictly prohibited.
ESMA Guidelines on ETFs and Other UCITS Issues
As required by Article 37 and/or Article 38 of the Markets in Financial Instruments Regulation ("MiFIR"), MSCI makes available the following licenses of MSCI indexes to certain central counterparties (CCPs) and trading venues (as defined by MiFIR):
- Trading and Clearing Licence is required for CCPs and trading venues to list, trade and clear futures and options based on MSCI indexes.
CCPs and trading venues wishing to exercise their access rights under MiFIR are required to complete the request form.
IOSCO Principles for Financial Benchmarks
MSCI voluntarily adheres to the International Organization of Securities Commissions Principles for Financial Benchmarks (“IOSCO Principles” or “Principles”). First published in July 2013, the IOSCO Principle’s objective is to create an overarching framework of principles for benchmarks used in financial markets.
MSCI supports the IOSCO Principles and their objective. MSCI has a long history of defining and applying sound practices in its index product lines. MSCI believes there are many dimensions to having an effective and transparent high-quality index capability, including strong governance and controls over methodologies and processes. These ideas have been part of MSCI’s culture and operating framework for many decades.
In 2014, MSCI began to publish statements of adherence to the IOSCO Principles across its indexes. In 2018, MSCI became a registered benchmark administrator under the EU Benchmarks Regulation (BMR), which in turn is based on the IOSCO Principles. MSCI has integrated its approach to adherence with the IOSCO Principles into its framework for complying with the BMR.
Clients of MSCI may request further detail regarding MSCI’s adherence to the IOSCO Principles here.
DATA SUBMITTERS TO MSCI PRIVATE REAL ESTATE INDEXES
We ask data submitters to adhere to our MSCI Real Estate Data Provider Code of Conduct so that the submission processes for data included in the MSCI Private Real Estate indexes and benchmarks are in line with the IOSCO Principles and best practices.
The ‘Data Submitter Code of Conduct – IPD Indexes and Benchmarks” has been updated and renamed to the “MSCI Real Estate Data Provider Code of Conduct” on November 26, 2018.
For further information and if you provide data to us, please read the document below:
United States IRS 871(M) Regulations Relating to the Definition of a “Qualified Index”
In response to feedback from numerous market participants, MSCI has decided to provide information regarding select indexes to help facilitate MSCI’s clients’ determination whether an index qualifies as a “Qualified Index” under Section 871(m) of the Internal Revenue Code.
MSCI Equity Index Policy regarding United States IRS 871(M) regulations relating to the definition of a “Qualified Index”
MSCI’s Responses to regulatory consultations
Formal Index Complaints
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 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 MSCI Private Real Assets Indexes, please contact the MSCI Real Estate Client Services team via firstname.lastname@example.org.