In a statement, FTSE Russell said that the indicative index will be calculated every 15 seconds with data sourced from selected digital asset exchanges vetted and approved by DAR Data Services. FTSE Russell will also provide VWAP for all the main 100 digital assets taking raw prices from the exchanges.

“Digital assets are a fast-growing segment of the market and we are delighted to be working with DAR. The new indicative FTSE Digital Assets Index will help the market evaluate a benchmark and assist in the creation of industry standards. It will also offer much needed transparency and create greater awareness for investors interested in this new asset class,” said Mark Makepeace, non-executive chairman for the information services division at LSEG.

FTSE Russell will establish an advisory group which will work to define the assets that are eligible for the index, and will publish these in due course, but the index provider added that the digital asset market includes exchanges and trading venues that trade cryptocurrencies, tokens and coins.

“DAR is a recognised expert in this new and rapidly evolving market. The FTSE DDS Digital Assets Reference Price takes trade prices from select vetted digital exchanges worldwide. Using data science and a robust methodology, we can create a clean price for potential future use by participants of this market,” Doug Schwenk, chairman of DAR Data Services, concluded.

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It said the new benchmarks give it full benchmark index coverage across Europe and will provide a low-cost alternative to existing benchmarks.

The new indices will launch on 19 June and include Bats Eurozone 50, covering the largest 50 companies with a primary listing in euros, and the Bats Eurozone All Companies. Six of the indices will be regional with a further 12 that are sector-focused.

Bats Europe launched its indexing business a year ago and sees it as a key part of its growth strategy.

Mark Hemsely, President of CBOE Europe – which owns Bats Europe – said: “We’ve built a very strong foundation for our indices business since our launch one year ago and have been encouraged by the positive response and support we have from market participants looking for a better solution for their indexing needs.”

The first year has seen Bats lauynch 57 indices across 15 markets, including two Brexit-based indices.

The firm said in addition to its multi-year discounts, licensees will receive further discounts for multiple indices and will not see an annual increase in fees this year.

Guy Simkin, head of business development for Bats Europe, added: “Launching these new regional benchmark indices enables us to provide customers with a single alternative solution to their benchmark needs across all European markets, with indices that are highly correlated with their peers, but systematic in approach and significantly less expensive to use.”

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ICE will take over the global research division’s index platform from BAML, the second most-used fixed income indices by assets under management (AUM) globally.

Upon closing, the AUM benchmarked against the combined fixed income businesses of ICE will stand at nearly $1 trillion.

“We believe the BAML Global Research FICC indices will offer customers more choice alongside the ICE US Treasury indices and NYSE equity indices as comprehensive, trusted benchmarks,” said Lynn Martin, president and COO, ICE Data Services.

Terms of the deal were not disclosed, which is expected to completed by the end of the year.

“As the demand for independent indices rises, we are pleased to monetize this valuable set of benchmarks with a strategic owner,” said Candace Browning, head of Global Research, Bank of America Merrill Lynch.

The acquisition follows the purchase of Citi’s fixed income index business by the London Stock Exchange Group (LSEG) earlier this week for $685 million.

Exchanges are looking to expand into more profitable alternative business lines, such as the index and market data business, with revenues from traditional lines drying up.

In the first quarter of this year, ICE saw revenues from its trading and clearing businesses decline by 6% year-on year. However, its data and listing business saw an 8% growth overall, in which data services grew by 9% to %520 million. 

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Index provider Markit has confirmed it has been selected as the provider to administer and calculate UBS Investment Bank’s investible indices.

In announcing the deal, Markit’s co-head of Information, Adam Kansler, said he hoped that the deal would prove allow UBS an ‘efficient and transparent alternative to managing its indices in-house.

He explained: “With Markit’s deep expertise in providing complex and diverse indices and our robust systems and compliance framework to address existing and emerging benchmark regulatory requirements, we can provide UBS with an efficient and transparent alternative to in-house index management.

“This will allow the bank to more easily achieve regulatory best practices and concentrate on its core business of delivering financial products to its clients.”

Xavier de la Porte du Theil, head of Investment Strategies Structuring at UBS, added: “Markit’s governance and oversight structure, together with its deep index expertise, will help UBS satisfy regulatory best practices while also enhancing our ability to efficiently deliver leading index products to our clients.”

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Trading in equity index futures and options has been surging globally. According to the latest statistics from the Futures Industry Association (FIA), equity index volumes rose 8.3% to 5.83 billion contracts in 2014, equivalent to nearly 27% of the global market for exchange-traded futures and options and the biggest increase of any individual segment. Regionally, the volume increase has continued this year. In Europe, some 90 million equity index derivatives contracts were traded on Eurex in September, over 30% more than the previous year. Meanwhile, in the US, the Chicago Board Options Exchange’s (CBOE) SPX options contract traded more than 900,000 contracts per day on average in the year 2015 to date.

The growth has encouraged index providers to broaden their footprint in the market. One of the biggest movers in 2015 has been FTSE Russell, created when the London Stock Exchange bought index provider Russell last year. With the backing of its exchange parent the index company, which already holds a dominant position in the US small cap space with its Russell 2000 index and in the UK with the FTSE indices, the group is expanding its products into more US exchanges to compete with market leaders MSCI and S&P Dow Jones. The blend of US and European appears to have suited both companies.

“There was little overlap when combining the Russell and FTSE index businesses,” says Patrick Fay, global head of derivatives at FTSE Russell. “The combination of expertise provided a good opportunity to develop a global product set.”

The index provider has been hard at work. In September, FTSE Russell inked a deal to put the Russell 1000 index and Russell 1000 value and growth futures on the CME, supplementing the Russell 2000 options and futures already listed on the CBOE and Intercontinental Exchange (ICE). The following month the CME launched sterling and dollar futures on the FTSE 100 and FTSE China 50. Most recently, the CBOE launched cash options on the FTSE 100 and China 50. According to Fay, the expansion of FTSE Russell’s indices onto US derivatives exchanges, while facilitated by the acquisition, has been driven to a large extent by buy side demand.

“There was a lot of latent demand for FTSE 100 exposure in the US that wasn’t tapped which we hope we have addressed,” he says. “US clients don’t always have access to the UK-based futures or they prefer to trade within their US based accounts where their collateral is located, which these new products help with. A US buy-side client that wishes to gain exposure to the UK market can now use the new FTSE 100 dollar contract, for example, to obtain that exposure in a cleaner fashion.”

FTSE steps into the US

For next year the company plans listing FTSE emerging market and developed Europe index futures and options on the CME and CBOE to further creep into the US market. Whether it can disturb the established hegemony with its newer product segments is, however, open to question. The company is competing against heavyweight index providers in the form of the S&P 500 and MSCI which have long held sway in the large-cap and global index range. While the FTSE Russell products differ in their focus, breaking into this market is still ‘admittedly hard’ according to Fay.

MSCI is certainly the established heavyweight in the non-US global and emerging markets index space. Its derivatives on these indices have skyrocketed in the last few years. For example, volumes in the MSCI Emerging Markets (EM) futures, which are traded on ICE, grew to about 65,000 contracts per day in the third quarter, up  80% from the same period last year.

“Our footprint as a global index provider is bigger than any other,” says Ricardo Manrique, head of MSCI’s global derivatives licensing business. “Ours is a global franchise while the others is domestic.”

Not resting on its laurels, the index provider did a deal with the CBOE in April this year to list options on MSCI EM and MSCI Europe, Australasia and Far East (EAFE). Manrique is confident in the product’s draw.

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