Financial Markets Conduct (Market Index) Exemption Notice 2024

The Financial Markets Conduct Regulations 2014 require managers of managed investment schemes (MIS) to disclose the performance of an appropriate market index alongside the past performance of their funds in their quarterly fund updates (the market index requirement). The market index must be a “broad-based securities index”. This is not suitable for all types of funds and there is a significant number of funds that cannot comply with this requirement because no such index exists. This is particularly acute for alternative funds. 

This exemption allows managers of these funds to use peer group and composite indices as alternatives to appropriate market indices. If no alternatives are available, then the manager is relieved of the market index requirement altogether.  

The notice continues relief previously granted under Financial Markets Conduct (Market Index) Exemption Notice 2023 and introduces a new approach if the relevant assets of the fund include cryptocurrencies or commodities. In this case, the manager must use a cryptocurrency or commodity index or benchmark for those assets that is appropriate in terms of assessing movements in the market in relation to the returns from those assets and that is either independently administered or widely recognised and widely used in financial markets. This allows the use of an index or benchmark that is not broad-based and is not tracking only securities. If such an index or benchmark is available, the manager must use it and is no longer allowed to rely on the full exemption from the market index requirement, improving the information made available to investors.

View Financial Markets Conduct (Market Index) Exemption Notice 2024