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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 real estate indexes
MSCI indexes and MSCI 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.
EU BENCHMARK REGULATION
MSCI has been committed to high standards in benchmark administration long before the EU benchmark regulation (“BMR”) 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 BMR and have been an active contributor to its development from the outset.
Below you can find information about our status as regulated benchmark administrators in the UK and EU for our 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’s Financial Conduct Authority (“FCA”) as a UK benchmark administrator under the BMR for all of our MSCI equity indexes. MSCI Limited is listed on the FCA’s register and on the ESMA register for benchmark 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.*
MSCI Private Real Estate Indexes:
Under IOSCO, Investment Property Databank Limited (located and registered at Ten Bishops Square, 9th Floor, London E1 6EG, UK) is the administrator for the relevant MSCI Private Real Assets Indexes.
Further to MSCI’s consultation on the BMR in relation to MSCI Private Real Estate Indexes, MSCI has decided to apply in the EU as the benchmark administrator* for only those MSCI Private Real Estate Indexes below:
- the MSCI/AREF UK Quarterly Property Fund Index
- the MSCI UK Annual Property Index
- the MSCI UK Quarterly Property Index
- the 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 authorization in each instance).
Use of any MSCI Private Real Estate Index described above for a BMR regulated use requires a separate written authorization letter from MSCI. Only current MSCI real estate clients are eligible to apply for authorization. To initiate this process, MSCI clients are required to download the MSCI Private Real Estate Index Application for EU BMR Regulated Use here and send the completed application form to MSCI_RealEstate_EUBMR_Use_Application@msci.com. After reviewing the application, if MSCI approves the MSCI Private Real Estate Index for a BMR regulated use, the MSCI client will be required to sign the authorization letter issued by the relevant MSCI Private Real Estate Index benchmark administrator. MSCI will not accept, or reply to, any requests from parties that are not currently licensed 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 BMR regulated uses outside this MSCI authorization process is strictly prohibited.
Should you have any questions, please contact MSCI Client Service.
* For the period from January 1, 2018 until we are authorized in the relevant jurisdiction as needed, 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.
ESMA Guidelines on ETFs and Other UCITS Issues
IOSCO Principles for Financial Benchmarks
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), which is an association of organisations that regulate the world’s securities and futures markets, published the Principles for Financial Benchmarks in July 2013, initially calling upon benchmark administrators to disclose their compliance within 12 months of that date and then annually after that.
MSCI published its first adherence statement on www.msci.com in 2014 and continues to publish annual adherence statements.
MSCI’s most recent IOSCO adherence statements can be viewed below:
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”
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.