Advocacy

The IIA and its members have led the industry to adopt the highest standards. IIA members adhere to the IIA Best Practices, IOSCO Principles, and local regulations.

Indexes’ Five Truths

IIA’s members, all independent index providers, posit the following values:

  • 1 That indexes measure market activities, not create or distort them
  • 2 Indexes lower investment costs but are not investable products
  • 3 Indexes are transparent
  • 4 Index providers operate according to industry-standard methodology and best practices
  • 5 And index providers support product and technological innovation.

Our Place in the Ecosystem

Independent index providers serve a central and pivotal role in facilitating market access and investment democratization; yet the role of indexes in financial markets is frequently misunderstood. Indexes plug into, but are distinct from, well-defined flows of information and productization across a wide range of market participants and trading activities. See the chart below for their roles and these relationships’ structure.

  • price
    Market price Makers

    Market makers and traders create liquidity and facilitate trading of financial instruments to determine the market clearing prices for financial instruments.

  • Data
    Data Providers & Exchanges

    Pricing and trade data sources are used by index administrators to value the underlying constituents of an index. The most transparent sources for constituent prices are regulated securities or commodity exchanges and transaction facilities.

  • Index Providers
    Index Providers

    Index providers create, maintain, and govern the calculation and maintenance of an index and its methodology.

  • Bank
    Asset Managers, Banks & Product Issuers

    Asset managers create the investment vehicles and investible products, such as mutual funds or ETFs, to mirror a desired index. Indices are used as benchmarks to evaluate the performance of an active manager's portfolio of an index.

  • Investors
    Investors

    Investors ultimately purchase, sell, and trade investment products whether they are index based or actively managed. Investors or their financial advisors determine the appropriateness of the products that meet their investment objectives. Independent index providers do not determine whether any index-based investment product is appropriate for investor use. Index providers administer indices, but investors working with consultants, boards of trustees, financial advisors and asset managers determine the indices and/or index products they use.

Advocacy Resources

Indexes 101

What is an index? • A financial index measures the performance of a list of instruments (bonds,…

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SEC Comment on Tailored Reports

The Index Industry Association (IIA), an independent, not-for-profit organization composed of leading global independent index administrators, has…

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IOSCO Principles

The IOSCO (International Organization of Securities Commissioners) Task Force on Financial Market Benchmarks Consultation Report is an…

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EU Regulations

The Benchmarks Regulation introduces a regime for benchmark administrators that ensures the accuracy and integrity of benchmarks….

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IIA Best Practice Guidelines

Click below for more information about our best practices.