The long running issue of regulating index providers has turned a vital corner as the Index Industry Association (IIA) welcomes a proposed European regulation.
The Parliament’s proposal states that the ultimate objective is to ensure the integrity of benchmarks by guaranteeing that they are not subject to conflicts of interest, that they reflect the economic reality they are intended to measure, and are used appropriately.
Members of IIA include all the major index providers such as MSCI, S&P Dow Jones, Markit and FTSE so this vote is of vital importance to the industry.
A statement released by IIA says that it supports the proportionate and pragmatic approach taken by the European Parliament, which will help to restore confidence in the markets where problems have emerged.
The European Parliament’s Committee on Economic and Monetary Affairs has worked hard to sharpen the focus of the regulation to ensure its alignment with The International Organisation of Securities Commissions principles for financial benchmarks and make it workable, according the IIA.
However, the IIA is still concerned by proposal for the introduction of price regulation through legislation.
“[The] IIA hopes that policy-makers will be able to make significant progress towards a final agreement through fruitful trialogue negotiations in the months ahead,” says Rick Redding, chief executive officer of the body.
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