The Index Industry Association: Promoting Best Practices in the Index Industry to Strengthen Markets and Serve Investors by Rick Redding, CEO
In a recent opinion piece for Ignites, a notable publication for the ETF and mutual fund industries, I offered my views regarding the ways indexes have revolutionized the way people invest. To show how index products are helping drive down the costs of all products, I offered a number of examples of increased innovation and competition. I appreciated that Ignites allowed me a forum to demonstrate that the impact of indexes goes well beyond lowering fees, by also encouraging both active and passive managers to run their portfolios with increased transparency.
The Index Industry Association (IIA) began in 2012 and its members calculate approximately 2 million indexes. IIA is a non-profit industry association serving the fast-growing global community of independent index providers. Membership is open to independent index administrators worldwide and our current members include FTSE Russell, MSCI, S&P Dow Jones, STOXX, NASDAQ and more. Our mission is to represent the global index industry by working with market participants, regulators, and other representative bodies to promote sound practices in the index industry that strengthen markets and serve the needs of investors.
An excerpt of my article is shown below. For the full piece, please visit Ignites.
How the Index Revolution Has Pushed Innovation Industrywide
While increasingly precise indexes continue to help investors measure ever-more granular slices of the markets, they have also become the driver of investment product innovation.
When the first institutional index funds were created in the 1970’s, they were dubbed “un-American.” In the 1980’s, when the first equity index future and index option were listed, skeptics claimed that no one would continuously trade an index in real time.
But today indexes have exploded in number, changing the nature of how people invest and how asset managers, including active managers, build products. They have pushed fees for all products down, increased overall market transparency and prompted greater innovation.
About Rick Redding, Chief Executive Officer
Rick Redding is the CEO of the Index Industry Association (IIA), becoming its first CEO in 2012. In addition to his role of promoting education for market participants, he has been working with IIA’s members on global advocacy issues including the IOSCO Principles for Benchmarks and the forthcoming EU Benchmark Regulation. Redding spent most of his career in senior leadership roles with The CME Group (CME), a leading provider of benchmark futures and options products and an innovator in futures trading.