The leading measurement of volatility, the VIX Index, is getting more oversight in its measurement and administration.
The VIX also now will meet the certification requirements that bring it into compliance with the International Organization of Securities Commissions (IOSCO).
The Chicago Board Options Exchange, which publishes the VIX, announced the changes in a press release earlier. The CBOE Volatility Index or VIX is widely considered to be the leading benchmark of future (30-day) stock market volatility.
The VIX Index, calculated using real-time bids and offers of S&P 500 Index (SPX) options listed for trading on CBOE, is a recognized and accepted benchmark for futures and options trading under U.S. regulatory standards set by the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC).
CBOE has established an Index Administration Oversight Body (IAOB) to oversee VIX Index administration activities, documenting CBOE’s control framework and implementing formal written processes by which stakeholders can obtain further information and make complaints.
The exchange operator also enhanced its solid framework of internal controls for the VIX Index and aligned it with international best practices.
The VIX Index is the global index benchmark for volatility, said William Speth, CBOE Vice President of Research and Product Development. We have hardened our procedures around the index to confirm they will continue to meet the highest level of IOSCO-compliant standards.
IOSCO is an international body that brings together the world’s securities regulators and is recognized as the global standard setter for the securities sector. The group develops, implements and promotes adherence to internationally recognized standards for securities regulation and works with Group of 20 (G-20) nations and the Financial Stability Board (FSB) on global regulatory reform.
