The FTSE Russell governance framework is designed to meet the requirements of the European regulation on indices and rates used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds (EU BMR) that applied from 1 January 2018 and the retained EU law in the UK (UK BMR) which took effect in the United Kingdom at the end of the EU Exit Transition Period on 31 December 2020.
FTSE International Limited (FIL) is authorised as a Benchmark Administrator and regulated in the United Kingdom (UK) by the Financial Conduct Authority ("FCA") under the UK Benchmark Regulation (UK BMR). FIL is included in the FCA Benchmark Register.
FTSE EU SAS (FES) is authorised as a Benchmark Administrator by the Autorité des Marchés Financiers (“AMF”), is listed on the list of Benchmark administrators authorised or registered by the AMF, and is supervised by the European Securities and Markets Authority (“ESMA”) under the EU Benchmark Regulation (EU BMR).
Following the end of the EU third-country transitional period on 31 December 2025, in-scope benchmarks administered by FIL are available for use within the European Union through endorsement by FES, as an EU-based benchmark administrator. Information on FES as an endorsing administrator and on endorsed third-country benchmarks is available through ESMA’s Registers of Administrators and Third Country Benchmarks.
IOSCO principles
FTSE Russell fully embraces the recommendations made by the International Organization of Securities Commissions (IOSCO) in the Principles for Financial Benchmarks Final Report (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.
As such, we maintain IOSCO Statements of Compliance. The Statements focus on the design of internal controls assessed against associated control objectives which are informed by the IOSCO Principles as well as the EU and UK Benchmark Regulations (“BMR”).
Specifically, independent reasonable assurance over the assertions made by FTSE Russell in its IOSCO Statements of Compliance have been received from:
KPMG LLP in relation to several FTSE Russell Equity, Fixed Income & Sustainable Investment Indices
KPMG LLP in relation to FTSE Russell WMR FX Benchmarks, Interest Rate Benchmarks, Convertible Bond Indices and CoreCommodity CRB Indices.
ESMA guidelines on ETFs and other UCITS issues
ESMA’s guidelines on ETFs and other UCITS issues, first published in December 2013 and updated in August 2014, require that the financial indices that form the basis of index-tracking UCITS should meet certain requirements with respect to, inter alia, diversification limits, the transparency of the methodology and the availability of the weights of the index constituents.
To assist our index subscribers in undertaking a compliance review of the financial indices that form the basis of their UCITS and UCITS ETFs products, FTSE Russell has published a statement that summarises FTSE Russell’s position in relation to the ESMA Guidelines on ETFs and other UCITS issues.
To support the statement, the following information is publicly available online:
Qualified Indices under Section 871(m) of the US Internal Revenue Code and Treasury Regulation Section 1.871-15
Section 871(m) of the Internal Revenue Code (26 USC 871(m)) seeks to ensure that non-US persons cannot avoid withholding tax on US-sourced dividend payments through the use of financial derivatives. Save for the exemption provided by Treasury Regulation 1.871-15, such financial derivatives could include derivatives on financial indices.
To assist our index subscribers in undertaking a compliance review of the financial indices that form the basis of financial derivatives, FTSE Russell has published a statement that summarises certain information relating to FTSE Russell indices that may be relevant to a subscriber's consideration of its position in relation to Section 871(m) of the US Internal Revenue Code and Treasury Regulation Section 1.871-15.
To support the statement, the following information is publicly available online:
- 871(m) factsheets for indexes known to form the basis of financial derivatives
- FTSE Russell index-linked derivatives
Other, general information is available here:
Markets in Financial Instruments Regulation (“MiFIR”)
FTSE Russell licences applicable benchmarks required by relevant central counterparties (CCPs) and trading venues under Article 37 and/or Article 38 of MiFIR, pursuant to its derivatives licence agreement. CCPs and trading venues wishing to enter into such a licence should contact derivatives@ftserussell.com.
Sustainable investment data regulation
EU ESG Ratings Regulation
The EU ESG Ratings Regulation introduces a framework for ESG ratings providers in the EU, aimed at enhancing transparency, governance, and market confidence. FTSE Russell is not an EU ESG ratings provider; where ESG-related data is used in its indices, its sources and application are disclosed through index Ground Rules and methodology documents, with further information available via FTSE Russell documentation and ESG data guides. Learn more in the FAQ.
Sustainable investment metrics
The amendments to the European Regulation on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds (the EU BMR) introduced in November 2019 require administrators to explain how key elements of their benchmark methodologies reflect environmental, social and governance (ESG) factors. The ESG factors to be considered are prescribed in the regulation and these data tables provide the corresponding metrics for the benchmarks administered by FTSE International Limited which pursue ESG objectives.
Japanese Financial Services Agency’s (FSA) Code of Conduct for ESG Evaluation and Data Providers
LSEG endorses the Japanese Financial Services Agency’s Code of Conduct for ESG Evaluation and Data Providers and welcomes their continued efforts in supporting enhanced environmental, social, and governance standards in its markets, in line with the IOSCO principles.
It is a positive step toward improving the reliability, comparability and interpretability of ESG ratings and data products while remaining sufficiently flexible in a rapidly developing space. LSEG’s FTSE Russell and LSEG Data & Analytics businesses will seek to comply with the Code and its six core principles.
You can find FTSE Russell and LSEG’s Data & Analytics’ specific compliance with each of the principles and guidelines of the Code of Conduct.
