Tacoma, WA - Russell Investment Group will begin seeking multiple exchange listings of options based on its widely-followed family of 21 U.S. equity indexes beginning Jan. 1, 2005. This strategy of non-exclusive options listings - which is in line with industry standards for the multiple-listing of individual equity options -- is expected to result in an increase in volume and liquidity in these products.
At the start of the year, options exchanges that have obtained a license from Russell will be permitted to launch products based on Russell's benchmark stock indexes, including the large-cap Russell 1000Â® Index, small-cap Russell 2000Â® Index and broad-market Russell 3000Â® Index. This change in policy will coincide with the expiration of the current two-year exclusive licensing agreement with the Chicago Board Options Exchange (CBOE), which has been in place since Jan. 1, 2003.
"We look forward to increasing the exposure of Russell indexes to an expanded base of option market participants," said Kelly Haughton, strategic director of Russell indexes. "With more products based on Russell indexes on a wider range of exchanges we expect to see growth in both volume and liquidity across the board."
This change in listing policy follows a previous decision by Russell to enter into non-exclusive licensing agreements for options on Exchange Traded Funds (ETFs) based on Russell indexes. Since that move, taken two years ago, the volume in these products has increased ten-fold. In addition, identical futures products based on Russell indexes at the Chicago Mercantile Exchange (CME) and the New York Board of Trade (NYBOT) have recently experienced record volumes.
Russell is currently involved in negotiations to license its indexes with all six U.S. equity options exchanges, including: the Boston Options Exchange (BOX), the Philadelphia Stock Exchange (PHLX), the International Securities Exchange (ISE), the American Stock Exchange (Amex), the Pacific Exchange (PCX) in addition to CBOE.
This year marks the 20th anniversary of Russell indexes. Russell employs its indexes to objectively evaluate investment managers for multi-manager funds and other investment services. More than $1.4 trillion in assets are benchmarked to Russell indexes, and more than $449 billion is invested in passive index funds that use them as a model; a 100% increase since 1999.