Exchanges are now able to operate and administer their index calculations in-house.
And the first one is going to be the Singapore Exchange, thanks to Nasdaqq OMX, which is supplying a new computational system.
Nasdaq announced today the launch of its Nasdaq Index Calculation System, a standalone solution that provides marketplaces with a highly flexible index calculation platform to compute multi-asset, multi-currency indexes. The system enables exchanges to operate and administer index calculations in-house, which gives them the flexibility to define and create unique products while maintaining operational control and controlling IP ownership over the marketplaces’ indexes.
Offering gives other exchanges index producer capabilities, not to mention new revenue streams to boost their non-trading fee or data earnings.
“By generating their own indexes and working with partners to create investible products based on their indexes, marketplaces can better differentiate their brands and generate new sources of revenue for the exchange,” said Lars Ottersgard, executive vice president, Market Technology, Nasdaq. “We see this new technology giving other exchanges an opportunity to not only increase the profile of their respective market segments, but also add to the value of their existing market data business. Exchanges utilizing this product can offer new value added services while creating new sources of intellectual property and revenue lines.”
The Nasdaq Index Calculation features:
– the ability to incorporate multiple asset classes and multiple currencies.
– Powerful index administration with management of calculation creation, supervision and maintenance
– Multiple input and output interface handling capabilities;
– Historical database for historical reporting, restatements and back-testing;
– Suite of index reports including predictive reporting to calculate adjusted index values prior to actual re-calculation
For marketplaces that are seeking a complete index solution, but do not want full operational control of an index engine in-house, Nasdaq also offers a full index service, which includes in-bound data capture, index design and market data dissemination.
According to Nasdaq, the calculator is highly customizable and able to handle any type of index or asset type. The solution’s modular design supports efficient implementation of feed handlers, customer index types, calculation algorithms and reports, decreasing time-to-market for new index products.