Australian Stock Exchange And Standard & Poor's

Australian Stock Exchange (ASX) and Standard & Poor's Index Services (S&P) today announced their intention to form a long term strategic alliance under which S&P will operate ASX's index business. From 3 April, it is expected that S&P will assume ownership and management of the ASX index business. This will involve responsibility for calculating and maintaining the suite of ASX indices at an operational level and promoting and licensing the S&P/ASX indices on a global scale. ASX will receive a percentage of the revenues generated on an ongoing basis. The arrangement with S&P will ensure the index restructure due to take effect from 3 April 2000 should remain unchanged for at least three years, including the new S&P/ASX100, S&P/ASX200, and S&P/ASX300 benchmark indices. Australia's best known and most followed index, the All Ords, will also be maintained. S&P has also guaranteed to maintain the existing relationship with the Index Advisory Panel, as presently composed, to ensure valuable industry consultation over the ongoing development and enhancement of indices related to ASX markets is continued. The decision follows ASX's announcement on 9 August 1999 that it was conducting a strategic review of its index business, which followed a number of expressions of interest from international and local index providers. ASX managing director Mr Richard Humphry said that the strategic alliance with S&P would deliver international exposure and opportunities for ASX and its markets. "ASX has had discussions with all major world index providers and believes the S&P alliance provides the greatest potential to build on the success of our index business. We believe S&P have demonstrated in other countries the ability to support and develop local indices in a global environment,'' he said. "This alliance will significantly enhance the development of ASX's derivatives and Exchange Traded Fund (ETF) businesses, as well as align ASX with a leading global index provider operating at the level of best international practice." "The world's most successful index derivative products are based on S&P indices. The alliance between ASX and S&P will provide new opportunities to apply their experience and expertise to the Australian market."