Dow Jones Indexes, Markit Group Limited, and CDS IndexCo, a consortium of have signed agreements governing the calculation, marketing and licensing of the Dow Jones CDX Indexes.
Under the terms of the separate agreements, Dow Jones Indexes has sole responsibility for branding and licensing the Dow Jones CDX Indexes, and assumes joint responsibility with CDS IndexCo for marketing the indexes. Dow Jones has approved the Dow Jones CDX Index methodology, and will continue to oversee and approve the creation of any new indexes.
Markit assumes sole responsibility for administering the Dow Jones CDX Indexes, which includes collecting source data, compiling, calculating and distributing the CDX daily closing values and publishing historical data on its website. Markit will act as advisor to CDS IndexCo on methodology, overseeing the index rolls, and is responsible for the day-to-day running of CDS IndexCo.
“Dow Jones Indexes brings an objective and rules-based approach to the credit derivative index business with the integrity that the market expects from a global index provider,” said Kevin Pilarski, director of alternative strategies and derivatives at Dow Jones Indexes. “Since announcing the agreement, we have received tremendous interest from market participants in licensing the Dow Jones CDX Indexes to be used as underlying for investment products.”
The Dow Jones CDX Indexes were formed from the merger of the North American TRAC-X and iBoxx credit derivative indexes in April 2004. The creation of a single family of credit derivative indexes for North American and Emerging Market entities has enhanced the liquidity of the credit derivative market while providing a clear benchmark for credit investors.
CDS IndexCo is a consortium of sixteen investment banks which are licensed to be market makers in the Dow Jones CDX indexes. The market makers include: ABN AMRO, Bank of America, Barclays Capital, Bear Stearns, BNP Paribas, Citigroup, Credit Suisse First Boston, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan, Lehman Brothers, Merrill Lynch, Morgan Stanley, UBS, and Wachovia.