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Normandin Beaudry

Scotia Capital indices renamed DEX

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There, in black and white

NB Bulletin Vol. 10 N. 13, October 2007

PC-Bond announced a rebranding of the family of fixed income indices Scotia Capital.

On October 22, TSX Group's subsidiary, PC-Bond, announced that the Scotia Capital family of fixed income indices will be renamed to become the DEX fixed income indices. The goal of this change is to reflect the transition from a system where pricing is determined by a single dealer to one where pricing is determined by multiple dealers.

Let's recall that in October 2006, a wholly owned subsidiary of the TSX Group acquired PC-Bond and the Scotia Capital fixed income indices. The indices continued to be called "Scotia Capital" indices even though they no longer belonged to Scotia Bank. Moreover, at the time of this transaction, the TSX Group entered into a long term agreement with Scotia Capital under which Scotia Capital agreed to provide data on the valuation of fixed income securities.

TSX Group wishes to use this new branding to align the names of fixed income indices with that of the future Canadian derivatives (options, futures, etc.) exchange. This exchange, which will be launched by TSX Group and International Securities Exchange, is scheduled to begin operation in March 2009.

In spite of these changes in names and pricing system, it is important to note that there are no changes to methodology, constituents, criteria for inclusion or historical data for fixed income indices. For example, the DEX Universe Bond Index is simply a continuation of the Scotia Capital Universe Bond Index.

The table below presents the new names of the main indexes:

 

 Although the name changes of PC-Bond indices will have no impact on historical returns, it will be important to make the necessary amendments to investment policies at their next periodic review.

 

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