Rick Redding2021-08-31T16:20:34+00:00May 6, 2020|
Following the suspension of index rebalancing by major index providers during March, concern around control of index provision has risen. The question of how control of indexing impacts funds and investors needs addressing. Self-indexing is one option for firms, [...]
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President and Head of Indexes, Morningstar Inc.
Ron Bundy is Managing Director and head of the Morningstar indexes business. Ron joined Morningstar in 2019 and is responsible for all business activities related to index data licensing, benchmark adoption and IP licensing for ETF’s, mutual funds and derivatives.
Prior to joining Morningstar Ron was CEO, Benchmarks North America for global index provider FTSE Russell, part of the London Stock Exchange Group (LSEG). Before Russell Indexes were acquired by LSEG, Ron was CEO of the Russell Indexes division of Russell Investments, served on Russell’s executive committee, and was a member of the Russell global council. Prior to that, he served for two years as president and CEO of Russell’s business in Japan and head of Russell’s office in Tokyo. Ron also served at Xerox Corporation for 10 years and was active in sales, sales management, and senior management roles.
CEO, Index Industry Association
email: r.redding@indexindustry.org
Rick spent most of his career in senior leadership roles with The CME Group (“CME”), a leading provider of benchmark futures and options products and an innovator in futures trading. Rick held the post of Managing Director, Products and Services at CME. In this role he led global sales, product development, and strategic global growth initiatives. He played an integral part in the transition of CME’s ownership stake in Dow Jones Indexes to the S&P Dow Jones Indices joint venture. He also held senior positions in CME’s index products division.
COO, CRSP
Dave is CRSP’s first non-academic director and has served as chief operating officer since 1998. Under his tenure, CRSP has expanded its product base beyond historic financial databases and academic indexes with the introduction of investible indexes in 2012. CRSP’s research client base now includes approximately 500 academic institutions and 100 commercial and governmental entities in over 35 countries. CRSP investible indexes and related data are now licensed to Vanguard for 16 of their domestic funds, to a significant list of broker dealers to support their market-making activities, and to consultants and institutions using them for consulting and for research and to benchmark investment performance. At this time Vanguard has approximately $1.25 trillion invested tracking CRSP indexes.
Dave previously served as an Executive Vice President at Heitman Financial, Ltd, and held official positions at Harris Bank, and the Northern Trust Company. Dave earned his MBA from the University of Chicago Graduate School of Business (now Chicago Booth) in 1970, and received his BS in Physics from Stanford University. Outside of CRSP he is CEO of two family agribusinesses that raise corn and soybeans, and he collects antique cars.
Senior Vice President, Global Head of Information Solutions, at Cboe Global Markets
Catherine Clay is Senior Vice President, Global Head of Information Solutions, at Cboe Global Markets, and oversees three business lines: index services, enhanced market data and analytics, and execution services. She came to Cboe through the 2015 acquisition of the San Francisco fintech company, LiveVol, where she was CEO. LiveVol transforms multi-asset market data into actionable information through unique analytics.
Prior to LiveVol, Catherine was a market-maker in equity and index options on the NYSE Arca floor from 1994-2010, starting her career with Interactive Broker’s market-making division before co-founding her own proprietary trading firm.
Head of Indices, ICE Data Indices, LLC (“IDI”)
Phil Galdi is Head of Indices at ICE Data Indices, LLC (“IDI”). In this role, he is responsible for IDI’s fixed income, equity, commodity and currency index families spanning the global markets. Prior to joining ICE, Phil was Head of Global Bond Index Research at BofA Merrill Lynch Global Research where he spent over 30 years developing and managing their fixed income, commodity and currency index platform that was recently acquired by ICE. The ICE Data Indices team manages a suite of thousands of indices across all asset classes that are used as performance benchmarks for approximately $1 trillion in assets, including over $200 billion in passive ETFs and funds. The team also provides custom index services and acts as calculation agent for third party indices. In addition, ICE Data Indices is a leading provider of IOPV and IIV calculations for ETFs around the world.
Chief Executive Officer, S&P Dow Jones Indices
Dan Draper is Chief Executive Officer at S&P Dow Jones Indices (S&P DJI), responsible for all aspects of the index business globally. S&P DJI is the world’s leading index provider and offers investment professionals around the world an array of products from core indices such as the S&P 500® to broad comprehensive benchmarks.
Before joining S&P DJI, Mr. Draper held asset management, wealth management, and investment banking leadership positions in New York, London, Hong Kong, and Jakarta with Invesco, Credit Suisse Asset Management, Lyxor Asset Management, iShares/Barclays Global Investors, Goldman Sachs, UBS Wealth Management, and Salomon Brothers.
Mr. Draper earned an MBA from the Kenan-Flagler Business School at the University of North Carolina at Chapel Hill and a Bachelor of Arts in economics from the College of William and Mary in Virginia. He is a Chartered Financial Analyst® (CFA) charterholder and holds the Chartered Market Technician®, Chartered Alternative Investment Analyst, Financial Risk Manager, Certified Financial Planner®, and Chartered Financial Consultant® designations.
Mr. Draper is a chartered director and fellow at the Institute of Directors in the UK and a board leadership fellow at the National Association of Corporate Directors in the U.S. In addition, he is a fellow of the 2017 class of the Aspen Institute Finance Leaders Fellowship and a member of the Aspen Global Leadership Network. He serves as a board director for the Lyric Opera of Chicago and Delta Dental of Virginia.
President, MSCI Inc.
As President, Baer Pettit oversees the Company’s business functions, including client coverage, marketing, product management, research, technology and operations.
Baer is an Executive Officer of the firm as well as a member of MSCI’s Executive Committee. Before taking on his current role in October 2017, he served as Chief Operating Officer. In this role Baer was responsible for oversight of the development, operations and profitability of the firm’s full product line, which includes index, analytics, ESG and real estate products.
Prior to being Chief Operating Officer, Baer held a number of senior management positions at MSCI including Global Head of Products, Global Head of Index and Global Head of Client Coverage, taking on the additional role of Head of Marketing in 2005.
Prior to joining MSCI in 2000, Baer spent eight years at Bloomberg LP, where he ran the business in France, Scandinavia and the UK. He later became Deputy Head of Bloomberg’s European Sales organization. Before this, Baer worked in the Equity Derivatives division of Barclays De Zoete Wedd and at Morgan Stanley Asset Management, also related to equity derivatives. After graduate school, Baer worked in advertising and journalism for a number of years.
Baer is both a US and UK national and speaks French, German and some Dutch. He received an MA in History from Trinity College, Cambridge in 1985 and a Masters from the School of Foreign Service at Georgetown University in 1987.
Baer appears regularly in the financial media, including TV, to discuss the latest trends within the asset management industry, including the role of indexing.
IIA Chairman and Group Director of Information Services, LSEG and CEO, FTSE Russell
Waqas was appointed Group Director of the Information Services Division in January 2019. He joined LSEG in 2016 as CEO of the Benchmarks business where he has been responsible for leading FTSE Russell’s continued global growth into indexes across all asset classes. He led ISD’s expansion in fixed income through the acquisition of the Citi Fixed Income Indexes and The Yield Book businesses. He was also responsible for the FTSE Canada business in North America. Waqas has spent almost 25 years in the financial services industry and joined LSEG from Barclays in 2016, where he was CEO of Barclays Risk Analytics & Index Solutions (BRAIS). Prior to joining Barclays in 2007, he spent three years at Deutsche Bank as Head of the Index Research Group in Europe and Asia and he spent five years at Credit Suisse in a variety of quantitative and technology roles. Waqas holds a Bachelor’s degree in Electrical and Electronic Engineering from Imperial College London and has completed the Investment Management Programme at London Business School. He is Chairman of the Index Industry Association.
An Index Provider (IP) shall maintain reasonable business continuity and disaster recovery plans to ensure that, as far as practicable, indices can continue to be calculated and published in an orderly and timely manner notwithstanding the occurrence of disruptive events.
(7.1) An IP should develop plans designed to ensure continuing index calculation and publication in the event of extreme weather, natural disasters, or other events that could affect the IP’s offices.
(7.2) An IP should develop and maintain appropriate security and recovery measures designed to protect its computer networks against viruses, hackers, and other intentional efforts to disrupt or compromise its operation.
(7.3) An IP should develop plans designed to ensure continuing index calculation and publication in the event of the incapacity or unavailability of key business personnel.
(10.1) An IP should allocate appropriate resources, and have in place adequate control systems, so that the IP, its staff can comply with the Practices.
(10.2) An IP’s executives and staff should be held to high professional standards of integrity and propriety.
(10.3) In accordance with local law, an IP should maintain appropriate escalation policies and procedures for members of staff to raise concerns regarding inappropriate or unlawful practices relating to the indices (for example, a “whistleblowing policy” or an “insider dealing” policy).
(10.4) An IP’s compliance with the Practices should be reviewed periodically as appropriate given the IP’s organizational structure.
(10.5) If material deficiencies in compliance are identified in the course of any such review, an IP should implement remedial measures promptly.
(10.6) The IP’s Board, senior management, or the senior management of its ultimate corporate parent, should be able to confirm that (i) periodic compliance reviews of the Practices have been conducted, (ii) any necessary remedial measures have been taken, and (iii) appropriate parties have been advised as needed of matters arising from the review.
(10.7) Following each periodic review of the IP’s control framework, an IP should consider the detailed findings of that review, and, when remedial measures are necessary or appropriate to address the findings of that review. and, when remedial measures are necessary or appropriate, implement those measures to address the findings of the review. An IP will document all reviews of its control framework, the work papers underlying those reviews, the details and summaries of the results of those reviews and the IP’s responses to those reviews in accordance with the Practices and any applicable law or regulation.
(9.1) An IP should ensure that there are appropriately documented procedures for the communication, management, and timely resolution of complaints related to its indices or third parties engaged as data suppliers or calculation agents.
(9.2) If the cause of the complaint is fairly attributable to an IP’s third-party supplier of data or calculation agent, the IP should provide prompt written notice of the complaint to the relevant third party.
(9.3) If the cause of the complaint is systematic or likely to recur, an IP should consider appropriate remedial measures to reduce the likelihood of such complaints arising in the future.
(8.1) An IP should maintain adequate internal records in connection with index services, such as official publications, evidence of supervisory reviews or approvals, any material complaints, and any methodology changes. Such records should be maintained for at least five (5) years (or otherwise in accordance with applicable laws or corporate record keeping policies).
(8.2) An IP should adopt appropriate control systems and procedures to preserve the confidentiality of sensitive information. An IP should consider such measures an as email and document encryption policy, network firewalls, and restrictions on physical and electronic access to confidential information.
(6.1) An IP should adopt and maintain appropriate policies to address conflicts of interest. A conflict of interest framework should seek to mitigate existing or potential conflicts of interest created by the IP’s ownership structure or control, or due to other interests in the IP’s staff or wider group may have in relation to index calculation and maintenance. To this end, a conflict of interest framework should establish clear boundaries between index calculation and maintenance within an IP and other business/commercial functional areas within the IP or its broader organizational framework and what action should be taken if any potential/actual conflicts of interests arise.
(6.2) In addition, an IP should:
(A) ensure that personal interests or business connections do not compromise the IP’s performance of its functions;
(B) establish a segregation of reporting lines within the IP, where appropriate, to clearly define responsibilities and prevent unnecessary or undisclosed conflicts of interest or the perception of such conflicts;
(C) put in place effective procedures to control the exchange of information among staff engaged in activities involving a risk of conflicts of interest or between staff and third parties, where that information may reasonably affect any index calculation and maintenance activities;
(D) establish appropriate remuneration policies for those responsible for index calculation and maintenance to ensure that those policies do not create conflicts of interest; and
(E) adopt policies regarding the proper use of material non-public information and compliance with applicable anti-bribery and anti-money laundering laws and regulations.
(5.1) An IP should establish policies and procedures to ensure the well-controlled and timely dissemination of indices that it has agreed to publish.
(5.2) An IP should establish policy and procedures to ensure that any material changes to indices or index methodologies are published or otherwise made available in a timely manner.
(5.3) An IP should establish policies and procedures to ensure that any corrections to information published about an index (in accordance with its stated policies) are disseminated promptly after it is determined that a correction will be implemented with appropriate transparency and breadth of distribution.
(5.4) An IP should maintain appropriate policies and procedures to govern its public announcements concerning its indices.
(4.1) An IP should establish policies and procedures to ensure that its indices can be calculated on a consistent, regular, and timely basis.
(4.2) Where practicable and commensurate with a risk-based analysis of its data providers, an IP should implement processes to validate incoming data.
(4.3) Any demonstrable failure by IP staff or third parties engaged as agents to adhere to published index methodologies or processes in calculating indices should be subject to internal review. and, as needed, a remediation process.
An Index Provider (IP) shall take appropriate steps to utilize reliable sources of data and shall maintain clearly defined policies and processes for collecting, evaluating, and utilizing relevant data in connection with index calculation.
(3.1) An IP should specify in its internal records the criteria that define the sources of data which are or may be used in connection with index calculation.
(3.2) An IP should establish and follow consistent procedures designed to ensure that it selects only reputable, reliable vendors or institutions as sources of data used in calculating indices.
(3.3) An IP should establish, implement, and maintain adequate internal controls designed to ensure that data utilized in index calculation are robust and dependable.
(3.4) An IP should, commensurate with a risk-based analysis of its data providers, and to the extent practicable, establish policies and procedures for identifying anomalous data received from sources, excluding such data from the index calculation process as appropriate, and taking appropriate remedial actions where practicable to minimize the possibility of recurrence.
(3.5) An IP will maintain records of the sources of data used in connection with index calculation to the extent practicable and without violating any agreements or applicable laws for the purpose of enabling the verification of the calculation of the index.
(3.6) IPs should construct indices using data that are best suited to measure an index’s objectives. Such date should reflect an existing underlying market based on prices, rates and price assessments derived from price evaluation sources, other data anchored in market-observable information or, where appropriate, valuations using expert judgments. The sources should be separate from the index maintenance functions to ensure all prices used in calculation of the index are anchored by arms-length or other market-observable validation or, where appropriate, valuations using expert judgments.
(1.1) An IP’s Board, the senior management of the IP, its ultimate corporate parent, or equivalent body should appoint and empower a governance body accountable for the administration, calculation, or maintenance of its indices (the Governance Body). The nature of the Governance Body may vary depending on the type of index and may comprise a formal board, a dedicated committee, or an individual manager. In all instances, however, it is essential that there be a single identifiable authority within the IP with specific accountability for the governance of the index.
(1.2) The Governance Body should provide oversight designed to ensure that:
(A) The IP’s senior managers within the governance function have the requisite skills, capacity, knowledge, and experience to perform the duties assigned to them.
(B) Relevant employees of the IP are allocated specific duties and responsibilities in relation to oversight and control functions, including a compliance infrastructure regarding index services, and have sufficient resources to be able to perform those duties and responsibilities effectively; and
(C) The IP continues to act in compliance with the Practices, as certified through periodic reviews.
(1.3) An IP should have in place appropriate reporting lines and organizational structures to facilitate effective checks and balances and transfers of management information to appropriate senior managers in the IP’s organization.
(1.4) If an IP engages a third party as its agent to administer, calculate, or maintain an index, or it enters into a joint venture, partnership or other similar arrangement for the administration, calculation, or maintenance of an index, the IP should establish clear roles and responsibilities for that party and receive adequate assurances that the party’s index-relevant activities facilitate delivering the index according to the IP’s methodology.
(1.5) If an IP jointly owns an index with another partner, the IP should establish clear roles and responsibilities for the partnership and design clear standards for its activities to facilitate delivering the index according to the IP’s methodology.
(1.6) An IP should conduct regular training for staff on the relevant policies and procedures in relation to its index operations, such as the handling of confidential information, conflicts of interest, personal account dealing, editorial independence, data integrity, and business continuity and disaster recovery plans.
(2.1) An IP should clearly document the methodology for each of its indices and, subject to those qualifications set out below in Standard 2, for each index intended for commercial use, publish the methodology on its website, to the extent practicable and without violating any agreements or applicable laws restricting such publication. Published index methodologies should include a description of the objective of the index and how the index is calculated and maintained, described in sufficient detail to allow users and potential users to assess the objectives of the index and the relevance and suitability of the index to their purposes on an ongoing basis.
(2.2) Material changes to index methodologies should be rigorous and updated in a timely manner. Substantive amendments to an established methodology should be made according to a clear and documented process.
(2.3) An IP should periodically review its indices methodologies to ensure that they continue to be designed to meet the stated objectives of the index.
(2.4) An IP should consider feedback received from subscribers, data contributors, and other market participants in the context of any review of its index methodologies, as appropriate.
CEO, S&P Dow Jones Indices
Alex Matturri is chief executive officer at S&P Dow Jones Indices, responsible for all aspects of the index business globally. S&P Dow Jones Indices offers investment professionals around the world an array of products from efficiently representative indices to broad comprehensive benchmarks.
Previously, Alex was senior vice president and director of Global Equity Index Management at Northern Trust Global Investments (NTGI). There, he was responsible for all facets of passive equity portfolio management and trading, overseeing a $185 billion passive investment business for the world’s third-largest quantitative manager. In addition to leading investment teams in the U.S., Europe and Asia, Alex was a driver for the global expansion of the passive investment business across all regions. Alex joined NTGI in 2003 with the company’s acquisition of Deutsche Asset Management’s Index and Quantitative Investment business. At Deutsche, he served as director and senior index investment strategist.
From 1987 until joining Deutsche in 2000, Alex served as vice president and division head at The Bank of New York where he managed the Special Investment Products group which provided investment management, product development, and trading for equity derivatives and quantitative strategies. Alex was a pioneer in the use of equity derivatives and exchange traded funds in institutional and high-net-worth portfolios. In 1993 Alex started The Bank of New York’s transition management business which was one of the first providers of portfolio transition and asset reallocation services. His experience before The Bank of New York included roles as a risk arbitrage analyst at Donaldson, Lufkin & Jenrette and security analyst at First Fidelity Bank.
Alex is a Chartered Financial Analyst and is admitted as an attorney in New York and New Jersey. He is also a member of the CFA Institute and The New York Society of Security Analysts. Alex holds a BS in finance with honors from Lehigh University and a JD from Syracuse University College of Law.
Head of Market Data & Analytics, Deutsche Boerse AG
Holger Wohlenberg became Managing Director of Deutsche Boerse in July 2004. He is responsible for the Group’s Market Data & Services business. Holger joined from Deutsche Bank where he headed Technology Investment Banking.
He began his career at McKinsey & Company, where he was focused on advising technology, network and media clients. He was elected Partner in 1997.
Holger received a PhD degree in Business Administration, major in Information and Communication Economics, from the University of Munich.
Holger Wohlenberg is chairman of Stoxx Ltd.
