Chi-X Europe, the leading pan-European equities exchange, and Russell Investments, owner of global equity benchmarks with US$3.9 trillion in assets benchmarked to them, today announced the creation of an alliance to launch a new series of European indices.

The new series will be designed to offer more efficient and relevant benchmark indices than those currently available. The new indices will provide targeted exposure by incorporating the most liquid and highly capitalised stocks across Europe to ensure the necessary regional coverage and high investability. The indices also will efficiently balance currency exposure and tracking error with the number of constituents to appeal to the widest possible audience of equity index users.

All the new indices will be constructed using Russell’s transparent, rules-based methodology, ensuring consistency, predictability and objectivity for the industry. Chi-X Europe’s traded prices will be the underlying price source and, therefore, for the first time, provide homogeneous pan-European pricing.

It is anticipated that Chi-X Europe will list futures and options contracts on the indices in the future. It will seek to leverage its highly liquid pan-European cash equities market to compete with incumbents and deliver technology, cost and risk efficiencies to its wide range of users.

Commenting on the launch, Alasdair Haynes, CEO of Chi-X Europe, said: “Similar to the launch of Chi-X Europe in 2007, we are again bringing new competition to the marketplace by introducing a product we feel is superior to what is currently available. Our trading participants have recognised the value of a single venue on which to trade equities on a pan-European basis and now it is only logical that equity index derivatives should benefit in the same way. By partnering with Russell, these highly liquid stocks and easily tradable indices offer the domestic, regional and international investment community a consistent methodology priced from our single consolidated pan-European exchange.”

Scott Stark, Head of Russell Indexes Europe, added: “To date, market participants that create, trade and hedge European equities, ETFs and derivatives have had to source market data from multiple providers. Using different construction frameworks and methodologies adds to complexity and costs. Therefore, in response to market demand, we are developing the new indices. These indices will employ Russell’s consistent, transparent and efficient methodology.”