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CBOE Holdings, Inc. (NASDAQ: CBOE) today announced the administration of the CBOE Volatility Index® (VIX® Index), widely considered to be the world’s premier financial benchmark of future (30-day) stock market volatility, is in alignment with the Principles for Financial Benchmarks established by the International Organization of Securities Commissions (IOSCO).
The VIX Index, calculated using real-time bids and offers of S&P 500 Index (SPX) options listed for trading on CBOE, is a recognized and accepted benchmark for futures and options trading under U.S. regulatory standards set by the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC).
CBOE policies and procedures cover administration of the VIX Index, which CBOE believes has contributed greatly to the VIX Index being considered a trusted barometer of market volatility. In aligning with IOSCO Principles, CBOE further enhanced its solid framework of internal controls for the VIX Index and aligned it with international best practices.
CBOE has established an Index Administration Oversight Body (IAOB) to oversee VIX Index administration activities, documenting CBOE's comprehensive control framework and implementing processes by which stakeholders can obtain further information and make complaints, the exchange said in a statement posted at www.cboe.com/vix.
The IAOB comprises CBOE staffers who have knowledge or experience in the creation or administration of financial market indexes.
“The VIX Index is the global index benchmark for volatility,” said William Speth, CBOE Vice President of Research and Product Development. “We have hardened our procedures around the index to confirm they will continue to meet the highest level of IOSCO-compliant standards.”
IOSCO is an international body that brings together the world's securities regulators and is recognized as the global standard setter for the securities sector. The group develops, implements and promotes adherence to internationally recognized standards for securities regulation and works with Group of 20 (G-20) nations and the Financial Stability Board (FSB) on global regulatory reform.
Visit the CBOE website for additional information about the VIX Index, including historical data, constituent and weightings information, and a detailed description of the calculation methodology.
A summary of CBOE's control framework, which provides more information about the measures in place to address the IOSCO Principles, is available upon request.
