Custodians, Spaulding Create Benchmark Data Cost Transparency Principles


BNY Mellon, State Street and Northern Trust, along with performance measurement provider The Spaulding Group, have created a set of principles to improve transparency around fees associated with the use of benchmark indexes and their data, to help asset owners make better-informed decisions about index use.

Under the principles, custodians such as BNY, State Street and Northern Trust will ensure the relative cost of benchmarks is made transparent to clients─taking into account the cost of index data and licensing fees, as well as the cost of collecting and processing data─and will perform free benchmark cost analysis for clients on request.

Nasdaq will license its Global Index Family to participating custodian banks at no charge. Other banks can join the initiative by acknowledging that they will abide by the principles.

"The ever-increasing cost of benchmark data... has been a major theme of our Performance Measurement Forums, and a hot topic of discussion at our annual Performance Measurement, Attribution and Risk conferences and in our surveys," says Spaulding Group founder and chief executive David Spaulding, in a statement.

"This initiative will help our clients better understand the costs associated with benchmark data and its impact on their portfolio," added Brian Downer, senior vice president and head of global product and platform solutions at State Street Global Services.

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