Index Licensing

IISL Indices are used as an underlying for a wide range of financial instruments offered by financial institutions, asset management companies, etc., to their investors worldwide. These include structured financial products as well as index funds and exchange traded funds. A license from IISL is required for creating a product based on or linked to an IISL index. IISL also offers annual global licenses covering all index-linked financial instruments by an institution, as well as licenses for single transactions.

Benchmarking

Investors, asset managers and financial institutions may use IISL indices to track the performance of funds, or as benchmarks for their actively managed portfolios, in particular. If an institution is benchmarking the performance of its product to any of the IISL Indices, prior approval is required from IISL along with payment of fees, where applicable. If the AMC or the financial institution uses the IISL trademarks and the indices as an underlying for their Products, then it is mandatory for these financial institutions to seek IISL’s prior approval and executing a license agreement with IISL.

Licensed Uses and Applications

Structured Products & Derivatives

The market for structured products and derivatives ranges from un-leveraged indexed notes to payouts for sophisticated, risk tolerant holders. IISL index-linked derivatives allow investors to create, control or maximize market exposure. Options, warrants, notes, bonds and trusts linked to IISL indices can be issued by prospective clients.

Index Funds

Indexing continues to gain popularity among individual and institutional investors. Most major mutual fund families have responded to client demands and added funds indexed to the IISL Indices. Index Funds today are a source of investment for investors looking at a long term, less risky form of investment. The success of index funds depends on their low volatility and therefore the choice of the index.

Exchange Traded Funds

The expansion of the exchange-traded funds market to the Indian exchange is a testament to the growing popularity of this product. The ETFs offers the ability to establish long-term investments based on the market performance of the top companies in India, with the ease of a single transaction and will provide the tools needed to capture the investment opportunities created by economic shift. For the mechanism to work, potential arbitragers need to have full, timely knowledge of a fund's holdings. The success of ETFs on indices depends on their low volatility and tracking error therefore the choice of the index.

Annuities and Other Insurance Products

Variable life, variable and fixed annuities and universal life products are structured to provide a return based on an IISL index's growth. Like a traditional annuity, purchasers receive a guaranteed return of principal along with a minimum interest rate. However, annuities linked to the IISL indices provide greater return potential by enabling purchasers to benefit from growth in the Indian stock market.

Guaranteed Funds and Structured Products

While passive index investing continues to grow, guaranteed products have long been a hallmark of these markets. In response to client demand, major asset management companies and banks issue index products such as tracker funds, warrants and individual certificates linked to IISL indices.

For information on licensing opportunities, contact

India Index Services & Products Ltd. (IISL)
Exchange Plaza
Plot no. C/1, G Block
Bandra-Kurla Complex
Bandra (E)
Mumbai - 400 051
Tel: (022) 26598386
Fax: (022) 26598120
Email: iisl@nse.co.in

Or, if you so wish, you can send us your queries / suggestions online

IISL HAS AND RETAINS ALL PROPRIETARY RIGHTS INCLUDING BUT NOT LIMITED TO THE INDEX NAME, TRADEMARKS AND COPYRIGHTS OF ITS INDICES AND ITS COMPILATION, COMPOSITION AND CHANGES THEREIN ARE AT THE COMPLETE DISCRETION AND CONTROL OF IISL.