In This Issue:

Indices; Proposed Extension of Rule 206(3)-3T; MNPI and Structured Products; and Investments by Federal and State Savings Associations.

- Excerpt from Indices

Recently, the Global Financial Markets Association (GFMA) published a statement of Principles for Financial Benchmarks, which are intended to represent best practices for financial benchmarks. The principles have as their objective promoting uniform, transparent and sound practices in relation to indices.

The GFMA defines a financial benchmark “as a commercial or published price assessment, distributed regularly to third parties and primarily intended for use as a reference in determining the pricing of, or the amount payable pursuant to, a financial instrument or contract.” The Principles acknowledge that financial benchmarks vary and may be used for various purposes and the Principles are not intended to apply to: indices that are primarily used for purposes other than pricing financial contracts; customized indices used for pricing bespoke bilateral or similar transactions among a limited number of counterparties; and indices issued by public sector entities. Based on these definitions, certain indices that are used as reference assets for structured products or that are used in connection with ETFs may be included within the scope of the Principles, although it is not clear whether these types of products were contemplated in connection with the Principles.