FTSE Russell has an established reputation for transparent, robust, rules-driven index construction methodologies and is committed to leading global best practice standards in index governance.
In line with this philosophy, FTSE Russell publishes a Statement of Compliance with respect to the recommendations made by the International Organization of Securities Commissions (IOSCO) in the Principles for Financial Benchmarks Final Report (the IOSCO Principles). Independent assurance of the assertions by FTSE Russell in its Statement of Compliance has been received from KPMG LLP.
FTSE Russell fully embraces the IOSCO Principles and endorses IOSCO’s objective to address conflicts of interest in the benchmark-setting process, enhance the reliability of benchmark determinations, and promote transparency and openness.
FTSE Russell has a control and governance framework that benefits from:
- Strong internal governance operated through working groups formed of knowledgeable, experienced employees;
- Strong external oversight provided through advisory committees formed of senior, experienced market practitioners and stakeholders.
FTSE Russell manages conflicts of interest through the strong control framework it has in place.
As part of the London Stock Exchange Group (LSEG), FTSE Russell benefits from the Enterprise Risk Management Framework including internal policies implemented across LSEG. FTSE Russell undertakes an annual risk assessment of its third-party relationships as part of its control framework. LSEG Group Internal Audit programme includes reviews of FTSE Russell within its remit.
Quality of the Benchmark and Methodology
To ensure the quality of its benchmarks, all FTSE Russell indices have clear methodology documents that are publicly available.
In designing each index, consideration is given to the end user’s requirements, alongside the suitability and availability of the underlying market and reference data.
All indices and index methodology documents are overseen by the FTSE Russell Governance Board and, for certain indices, by external advisory committees.
To promote accountability, FTSE Russell has a number of policies in place which detail how index calculation issues and external events will be managed.
FTSE Russell has an established procedure in place for the management of any queries or complaints.