Global index, analytics and data provider, FTSE Russell, has launched a new country classification framework for fixed income which would complement the existing equity country classification process.
The new framework would reward each country tracked by fixed income indexes with a level of zero, one or two, with two representing the highest level of accessibility for foreign investors.
The process would assess countries based on four market criteria:
- Market, macroeconomic and regulatory environment
- Foreign exchange market structure
- Bond market structure
- Global settlement and custody
Also, the firm would publish a watch list of local currency, fixed-rate government bond markets being considered for potential classification of their market accessibility.
“We developed the framework in consultation with market participants and look forward to further engagement as we roll it out,” Chris Woods, Managing Director Governance and Index Policy, FTSE Russell, said.
“The introduction of minimum Market Accessibility Levels provides an evidence-driven, robust framework, which can be applied across both flagship and bespoke benchmarks and draws on our FTSE Russell index governance capabilities and heritage in equities.”