Index Provider Roles and Responsibilities
Index provider aims to compile statistics related to various asset classes, industries and securities to provide the investors with meant to quantify objectively and to compare asset classes and various market performance on an ongoing basis. Index providers actively monitor their indices to ensure that changes are made to reflect using index value. The Index company task is to connect the start ups and align the corporate brands and those interested to invest collectively. Indices are administered, maintained and index calculated by Index providers and used to provide a representation of particular market segment or index objective.
Index providers should follow following good practices as explained below:
- Governance
An Index provider should have good governance arrangements with clearly defined management structure and appropriate allocation of authority and responsibility. Index provider should continuously act in compliance with the latest practices of the industry. An index provider should regularly conduct training for staff on the relevant policies and procedures in relation to its index operation.
- Quality and transparency of Index methodology
An index provider should have made it public index methodology for indices that are intended for commercial use and should review index methodology time to time to maintain appropriate calculations and should ideally document these methodologies for each of its indices. Also index provider should consider feedback received from subscribers, data contributors and other market participants in the review of its index methodologies in connection with index calculation.
- Quality and Transparency of data collection
An index provider should 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.
- Index Calculation and verification
An index provider should ensure that its indices are calculated in accordance with its methodologies with established policies and procedures.
- Timely Publication
An Index provider shall ensure that information about its indices is published or otherwise made available in timely and appropriate manner.
- Conflicts of interest
An index provider should take appropriate steps to identify and address conflicts of interest arising in connection with index calculation and maintenance.
Source : https://agriculturetrindex.webstarts.com/blog/post/index-provider-roles-and-responsibilities