Scientific Beta

Index Universe: "There is a war raging between some mainstream index providers, who say too much data does not serve public interest, and EDHEC, the French think tank and business school which trumpets the values of full transparency, and offers investors free data as part of its own index platform."

Index Universe 30/12/2013

"(...) When it comes to the regulation of index providers, the industry seems to have reached an impasse. Issues such as publishing historic index constituents for free, and prioritising transparency and good governance are all causing disagreement, which could hinder the growth of smart beta development. There is a war raging between some mainstream index providers, who say too much data does not serve public interest, and EDHEC, the French think tank and business school which trumpets the values of full transparency, and offers investors free data as part of its own index platform. (...) One of the main debates revolves around index providers publishing current and historic data of all index constituents for free, which would be available to potential investors. Index providers and EDHEC have crossed swords over this issue many times. Eric Shirbini, business development director for Europe, ERI Scientific Beta at EDHEC-Risk Institute, said that publishing all data is extremely important to encourage investors’ trust in a new and relatively unfamiliar market. “Why does everyone want to shy away and cover up what they are doing?” he asked. “We ask for a record of index constituents and index weights. We are in favour of that as we think smart beta will grow very significantly over the next few years. If you’re not transparent, people will not trust what is in your indices.” (...)"