The US Securities and Exchange Commission is considering new rules that would treat index providers, model portfolio providers and pricing services as investment advisers.
The regulator issued a request for comment on the issue that would see providers such as MSCI, S&P Global and FTSE Russell, treated as giving investment advice rather than merely information and data.
SEC chair Gary Gensler stated on Wednesday (15 June) that changes in the industry, such as the growth of index trackers and the increased number of specialised indices, have left indexes "increasingly influential".
ETFs and other index trackers own at least a fifth of all American public companies, the SEC said, while index providers calculating over 3 million performance benchmarks for stocks and bonds.
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Gensler went on to say that "model portfolio providers and pricing services have similarly grown and evolved", raising questions about the level of regulatory oversight required.
He clarified that some information providers "may not fit neatly into the Commission's existing regulatory structure for investment advisers", leaving room to change existing rules on advisers.
Gensler noted that statements on the definition of investment adviser was issued throughout the 1980s and 1990s and so they would consider if updated regulatory action was required. He added that "some elements of the definition may not be interpreted consistently by market participants".
European rules on index providers that increased transparency and disclosure were brought in in 2016 and have been gradually adopted as a global standard.
