Index Sponsor Agreement

In May 2020, HKEX signed a 10-year licensing agreement with MSCI to license a series of MSCI indices in Asia and emerging markets for the introduction of 37 futures and options in Hong Kong. The agreement expands the existing partnership between the two companies and enshrines HKEX and MSCI`s commitment to a long-term program of product development and innovation in the region. In the primary market, ETF sponsors collaborate with holders of a creative organization or participating distributors (PDs), institutional investors such as brokerage houses authorized to produce ETFs. There are market makers who can also play the role of PDs, but who provide market liquidity. The PDs apply to the etf`s sponsors for a founding entity, thereby creating shares of the ETF through the purchase of a sponsor that takes the form of cash or an in-kind transfer, also known as a basket of securities. PDs can also apply to the withdrawal of sponsor creation units, the receipt of a basket of securities or cash in exchange. This process of creating and withdrawing PDs with an ETF sponsor provides liquidity to investors who wish to make large ETF trades. HKEX had launched 17 MSCI index futures in July. Following the August listings, HKEX plans to release the remainder of the 37 contracts this year, subject to the authorities` approvals and market conditions.

NETLXT is a rules-based passive index that, for the first time, defines and represents in a diversified way the performance of the fast-growing Net Lease real estate sector. The index clearly defines a sector not by the underlying types of buildings, for example. B industry, retail, office, etc., but by the control legal document called “Net Lease”, which can be used with any type of real estate. The index only covers stock REITs that derive most of their net rental income, i.e. “Net Lease REITS”. The index also limits the focus on an individual or tenant who aims to create a diversified portfolio that includes several companies, investment teams, tenant sectors, real estate types, geographic locations and especially tenants. A sponsor of the ETF designs the core index that supports the management of the ETF. A group of institutional investors provides the securities that will make up the fund and receives in exchange so-called creation units, i.e. shares of the ETF in giant blocks of 100,000 shares or more. Below is the list of MSCI DOLLAR-denominated index futures that will hit the market in August: “Net leasing is one of the fastest growing segments of the real estate market,” said Chris Burbach, CEO of Fundamental Income.

“As businesses recover from Covid-19 across the country, many are choosing to free up static capital by selling and leasing their real estate, instead of just owning it, which is contributing to the growth of the net leasing index.” An ETF sponsor is the fund manager or financial company that creates and manages an exchange-traded fund. The ETF sponsor usually deals only with the founding entities and institutional shareholders; They do not trade directly with stocks with investors. The ETF sponsor may also, at the request of an institutional shareholder, exchange physical securities to create shares. The Bonds are not sponsored, endorsed, sold or promoted by the Index or the Sponsor of the Index, and the Sponsor of the Index has not given any express or implied warranty, either in the form of the results to be obtained from the use of the Index, or the levels at which the Index is at any date or other date. . . .

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