Robust governance, transparency and integrity have always been at the foundation of our business
The European regulation of benchmarks as well as stakeholder-demanded governance improvements mean that strong governance is a primary concern for our clients. We are committed to leading global best practice standards in index governance and have established a reputation for transparent, robust and rules-driven index construction.
Our governance framework
To ensure that FTSE Russell indexes are constructed, maintained and operated to the highest standards, FTSE Russell employs a robust governance framework to approve new indexes and changes to the methodologies of existing indexes. The framework combines specialist decision-making bodies with members drawn from first line executive management, an oversight committee with members drawn from second line (risk and compliance) and third line (audit) management, supported by and a set of independent external advisory committees formed of market practitioners with specialist expertise on benchmark methodologies, input data and the underlying market.
Further information can be found here: FTSE Russell Governance Framework
Impact of EU membership on FTSE indices
With regard to the UK’s departure from the EU, being a member of the EU is not considered within the eligibility criteria for the FTSE UK Index Series, the FTSE Europe or Eurozone indices. Therefore the UK (or any other country) ceasing to be a member of the EU has no direct impact. In the absence of a Financial Services trade agreement between the UK and the EU that specifies to the contrary, or the EU making a positive equivalence determination for the UK under the relevant provisions of MiFID2, the European Share Trading Obligation may affect the relative liquidity of shares trading in London and EU27 venues, and could prompt companies to review their listing venues. Should such outcomes materialise, FTSE Russell will continue to apply the eligibility rules set out in the Ground Rules of the FTSE UK Index Series and the FTSE Global Equity Index Series and summarised in the Determining Nationality policy document.
Sustainable Investment Metrics
The amendments to the European Regulation on indexes 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.