IHS Markit takes over Danish bond benchmarking for Nordea
IHS Markit, and information and anlytics provider, has been appointed the independent benchmark administrator for Danish bond indices used by Nordea Bank.
Nordea will use the IHS Markit Index Administration Services for benchmark calculations, methodologies, periodic auditing and data distribution for indices covering Danish government and mortgage bonds.
Mark Schaedel, managing director, Index Services at IHS Markit, noted that the decision to outsource the administration could serve as a model more broadly across the industry, which as of January 2018 has had to adhere to new registration and data management requirements under the European Union Benchmarks Regulation.
The administration service that IHS Markit provides includes offering calculations and independent support for the design, maintenance and distribution of indices referencing fixed income assets, currencies, equities and commodities.
The European Securities and Markets Authority is responsible for coordinating the work of national competent authorities when it comes to supervision of administrators of indices.
Esma notes that: “According to Article 46 of the Benchmarks Regulation, within 30 working days from the inclusion of a benchmark in the so called ‘list of critical benchmarks’, to be issued by the European Commission, the national competent authority of that benchmark will establish a college including (at least) also ESMA and the national competent authorities of supervised contributors to the benchmarks.”
The European Commission noted when adding the Libor index to the ‘list’ in December 2017 that “A benchmark is considered as being a critical benchmark where it is used directly or indirectly within a combination of benchmarks as a reference for financial instruments or financial contracts or for measuring the performance of investment funds, having a total value of at least €500bn on the basis of all the ranges of maturities or tenors of the benchmark, where applicable.”