The Spaulding Group Launches Custodian Guidelines for Transparency in Benchmark Cost

BNY Mellon, State Street, and Northern Trust Join as Founding Adopters

Somerset, New Jersey, UNITED STATES

NEW YORK, Dec. 16, 2014 (GLOBE NEWSWIRE) -- The Spaulding Group, the leading performance measurement service firm in the money management industry, today announced the launch of the "Custodian Guidelines for Transparency in Benchmark Cost" in partnership with BNY Mellon, State Street and Northern Trust. The "Guidelines" were developed with the goal to improve transparency on embedded fees for benchmark data, and enable investors to make informed decisions by understanding the details behind the fees they are paying.       

"The ever-increasing cost of benchmark data has been an issue that has grown in importance every year. It has been a major theme of our Performance Measurement Forums, and a hot topic of discussion at our annual Performance Measurement, Attribution and Risk conferences and in our surveys," said David Spaulding, Founder and CEO of The Spaulding Group.

The Spaulding Group worked closely with three participating custodian banks to create a set of principles that the industry should abide by in order to increase awareness of the costs associated with indexes. This list of best practices is designed to lead to further efficiencies in the asset management industry by ultimately lowering fees paid by end-clients, predominantly asset owners.

The list of key principles which will be implemented over time by each custodian are as follows:

  • Provide transparency to end-clients on the relative cost of benchmarks
    • The total cost of using benchmark data may also be taken into account, including index provider licensing fees, and the resources involved to collect and process the related files and data 
  • Conduct a free customized benchmark cost analysis upon request from clients that would demonstrate the relative cost of benchmark data options.

The environment for licensing the use of benchmark data continues to become more complex, while the costs of that data keep rising. Providing transparency to our clients will help them understand the associated costs of their benchmark selection decisions which are required to monitor and analyze their investment portfolios," said Samir Pandiri, BNY Mellon executive vice president and CEO of Asset Servicing. 

"We are focused on ensuring that clients have access to the tools necessary to make informed decisions," said Brian Downer, senior vice president and head of Global Product and Platform Solutions within State Street Global Services. "This initiative will help our clients better understand the costs associated with benchmark data and its impact on their portfolio."  

"Enhancing transparency on fees for benchmark data is an integral part of our commitment to client service," said Fiona Horsewill, global head of product and strategy at Northern Trust. "Every basis point counts, particularly in an increasingly competitive investment management marketplace and the guidelines will enhance our clients' ability to capture investment opportunities while managing risks and costs."

In conjunction with the adoption of the "Guidelines," Nasdaq has agreed to license its NASDAQ Global Index Family at no cost to custodian banks that abide by the guidelines set forth by The Spaulding Group and will be offered by BNY Mellon, State Street, and Northern Trust as a low-cost reporting option.

Banks can join by publicly acknowledging they will abide by the principles that have been outlined.

"As the industry examines the fees associated with benchmarks, Nasdaq is focused on providing low-cost indexes that span geographies and asset classes," said John Jacobs, Executive Vice President, Global Information Services at Nasdaq. "We are excited to offer our Global Index Family to these custodian banks, as they work to increase transparency on the cost of index data. We applaud the work done by The Spaulding Group, BNY Mellon, State Street, and Northern Trust to bring this key issue to the forefront of the asset management industry."

A whitepaper focused on benchmarks will appear in the Spring issue of The Journal of Performance Measurement, co-authored by The Spaulding Group, BNY Mellon, State Street and Northern Trust.

For more information on the Spaulding Group's "Guidelines for Transparency in Benchmark Cost" and full transcript of the custodian bank interviews, please go to:

About State Street Corporation

State Street Corporation (NYSE:STT) is one of the world's leading providers of financial services to institutional investors including investment servicing, investment management and investment research and trading. With $28.47 trillion in assets under custody and administration and $2.42 trillion* in assets under management as of September 30, 2014, State Street operates in more than 100 geographic markets worldwide, including the US, Canada, Europe, the Middle East and Asia. For more information, visit State Street's web site at

* Assets under management include the assets of the SPDR® Gold ETF (approximately $30 billion as of September 30, 2014), for which State Street Global Markets, LLC, an affiliate of SSgA, serves as the distribution agent.

About BNY Mellon

BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 35 countries and more than 100 markets. As of Sept. 30, 2014, BNY Mellon had $28.3 trillion in assets under custody and/or administration, and $1.6 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE:BK). Additional information is available on or follow us on Twitter @BNYMellon.

About Northern Trust

Northern Trust Corporation (Nasdaq:NTRS) is a leading provider of asset servicing, fund administration, asset management, fiduciary, and banking solutions for corporations, institutions, families, and individuals worldwide. Chicago-based Northern Trust has offices in 19 states, Washington, D.C., and 20 international locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of September 30, 2014, Northern Trust had assets under custody of US$5.9 trillion, and assets under investment management of US$923.3 billion. For 125 years, Northern Trust has earned distinction as an industry leader in combining exceptional service and expertise with innovative products and technology. For more information, visit and follow us on Twitter @NorthernTrust.

About The Spaulding Group

With offices in the New York City and Los Angeles metropolitan areas, The Spaulding Group, Inc. is the leader in investment performance measurement products and services. TSG offers consulting along with GIPS and non-GIPS verification services. It conducts operations reviews and software certification as part of its consulting group. The firm publishes The Journal of Performance Measurement, a quarterly publication we launched in 1996 and hosts the Performance Measurement Forum and Asset Owner Roundtable. The firm also sponsors the annual Performance Measurement, Attribution and Risk (PMAR) North America and PMAR Europe conferences which are recognized as the leading performance measurement conferences in the industry. TSG's Institute of Performance Measurement offers performance measurement training, including a fundamental's course on performance measurement, a course on performance attribution, and two CIPM exam preparation courses.



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