The IIA Best Practices guide comprises 10 key principles that IIA members should meet in setting and maintaining indices. They cover governance, quality and transparency of methodologies, data collection, index calculation and validation, and complaints procedures.
The guide sets out standards for dealing with conflicts of interest, business continuity, confidentiality, record keeping, and internal controls.
Non-members of the IIA are able to adopt the best practices by becoming a signatory and confirming that they will abide by the standards.
Rick Redding, IIA executive director, said: “One of the main aims of the IIA is to represent the interests of index users and providers worldwide. The launch of the IIA Best Practices guide will help to achieve this aim as they are designed to ensure the highest standards of quality and integrity, but to do so in a way that fosters improvement, innovation, and vigorous competition in all aspects of the index industry.
“The best practices also demonstrate that index providers who are members of the IIA are meeting high standards and are fully aware of their responsibilities to index users.”
The IIA said such standards were necessary due to the systemic and material importance of many indices that are set or maintained by IIA members.
The IIA also announced the membership of CRSP, Research Affiliates and STOXX to the association.