Dow Jones Indexes joins forces with Markit and CDS IndexCo

Dow Jones Indexes, Markit and CDS IndexCo, a consortium of 16 investment banks, have signed agreements to govern the licensing, marketing and calculation of the Dow Jones CDX indexes.

The separate agreements stipulate that Dow Jones Indexes will have sole responsibility for branding and licensing the CDX indexes, and will have joint responsibility with CDS IndexCo for their marketing.

Meanwhile, Markit will administer the CDX indexes, which will include collecting source data, compiling and calculating daily closing values and publishing historical values. Markit will also advise CDS IndexCo on methodology and overseeing the index rolls.

Daily closing CDX index prices will be available on both Dow Jones Indexes’ and Markit’s websites.

“The role we play dovetails nicely with the central role that our reference entity database plays in ensuring the reference data in the indexes is both correct and market-standard,” said Kevin Gould, executive vice-president of Markit.

Dow Jones CDX, which consists of baskets of single-name credit default swaps, was formed in April 2004 with the merger of the North American Trac-x and iBoxx credit derivative indexes.

CDS IndexCo is a consortium of sixteen investment banks licensed to be market makers in the Dow Jones CDX indexes. They are: ABN Amro, Bank of America, Barclays Capital, Bear Stearns, BNP Paribas, Citigroup, Credit Suisse First Boston, Deutsche Bank, Goldman Sachs, HSBC, JP Morgan, Lehman Brothers, Merrill Lynch, Morgan Stanley, UBS and Wachovia.