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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 (and blended) 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.
EU BENCHMARK REGULATION
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 benchmark regulation and have been an active contributor to its development from the outset.
Below you can find information about MSCI’s status as a regulated benchmark administrator under the EU benchmark regulation (“BMR”).
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/EU 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’s register and on the ESMA register for benchmark administrators. The list of MSCI indexes covered by MSCI’s authorization with the UK’s Financial Conduct Authority (“FCA”) as a UK/EU 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
- 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.
Prior to the expiration of the Brexit transition period, MSCI Limited can be found on both the FCA’s register and on ESMA’s register for benchmark administrators. Pursuant to ESMA's notice on 7 October 2019, as of the date of the expiration of the Brexit transition period, UK administrators (including MSCI Limited) will be removed from the ESMA register and will become third country administrators. However, during the BMR transitional period (as defined in BMR Article 51) EU supervised entities can use third country benchmarks even if they are not included in the ESMA register. This BMR transitional period has been extended for all non-EU administrators until 1 January 2022, and non-EU administrators will have until 1 January 2022 to be permissioned into the EU under the BMR. This extension of the 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 FCA’s register.
MSCI Private Real Estate Indexes – Permissioning process for BMR regulated uses
Because contributors to MSCI Private Real Estate Indexes may be supervised contributors and regulated directly under the BMR, MSCI requires that all 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 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 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 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 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 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”
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 email@example.com.