Chi-X Europe, a pan-European equities exchange, and Russell Investments, have formed an alliance to launch a new series of European indices.
Russell said that the new series will be designed to offer relevant benchmark indices than those currently available.
According to the Russel, the new indices will provide targeted exposure by incorporating the most liquid and highly capitalized stocks across Europe to ensure the necessary regional coverage and high investability.
The indices also will balance currency exposure and tracking error with the number of constituents to appeal to the widest possible audience of equity index users.
All the new indices will be constructed using Russell’s rules-based methodology, ensuring consistency, predictability and objectivity for the industry.
Chi-X Europe’s traded prices will be the underlying price source and provide homogeneous pan-European pricing.
It is anticipated that Chi-X Europe will list futures and options contracts on the indices in the future. It will seek to leverage its liquid pan-European cash equities market to compete with incumbents and deliver technology, cost and risk efficiencies to its range of users.
Chi-X Europe CEO Alasdair Haynes said that by partnering with Russell, these highly liquid stocks and easily tradable indices offer the domestic, regional and international investment community a consistent methodology priced from the single consolidated pan-European exchange.
Russell Indexes head of Europe Scott Stark said that to date, market participants that create, trade and hedge European equities, ETFs and derivatives have had to source market data from multiple providers.
"Using different construction frameworks and methodologies adds to complexity and costs. Therefore, in response to market demand, we are developing the new indices. These indices will employ Russell’s consistent, transparent and efficient methodology," Stark said.