Regulatory

Societe Generale has been registered as benchmark administrator with the AMF under the European Benchmark Regulation (BMR) on 12 April 2019.

 

Benchmark Statements

The Benchmark statements of all SGI indices (excluding Factor Indices) falling in the scope of the European Benchmark Regulation  (the “benchmarks”) are published on the dedicated webpage of such benchmark.

The Benchmark statement of the benchmark family of Factor Indices that are underlying of Factor Certificates is below. For more information regarding such Factor Certificates, please go to https://www.warrants.com/. The Factor Indices description can be found in the Final Terms of each related Factor Certificate.

 

Compliance Statement - version as of 28/02/2020

 
 

Conflict of interest management

Warning: conflicts of interest risks which Societe Generale SA is exposed to as a benchmark administrator registered with ESMA following the European Regulation 2016/2011 of 8 June 2016 concerning indices used as benchmarks:

The activity of administering proprietary indices of Societe Generale SA, under the brand “SGI”, is integrated in the financial markets department of Societe Generale, “MARK”. The “SGI” proprietary indices are created primarily to be the underlying reference of products traded by MARK, which requires a regular interaction between the “SGI” index team and the other engineering teams within MARK.  

Furthermore, the “SGI” index team shall interact with the sales teams and the trading teams of the dealing room, particularly in the context of when new products are launched with an “SGI” index as an underlying reference.

The integration of the “SGI” teams within MARK leads to a risk of conflicts of interest.

Those risks are notably but without limitation:

  • Being incentivised to determine the level of the indices in a biased manner in order to favour  MARK’s interests; in particular by not correcting any calculation errors on the level of the indices, if these would be beneficial to MARK;
  • Being incentivised to change the compositions of indices in a way to favour MARK interests;
  • Being incentivised to change the index rules afterwards in a way to favour MARK interests;
  • In the case where “SGI” must use data provided by the Societe Generale dealing room to determine the level of certain indices, using data which could be unreliable
  • In the case where “SGI” uses advisors in certain indices in order to determine the composition of these indices and to manage in an insufficient manner the relationships with these advisors.

Furthermore, the trading teams of the dealing room which hedge the risks generated by the issuance of financial products by MARK, by taking positions on underlying financial instruments to replicate the indices composition, could be likely to have an interest in influencing the values of the indices components in the financial markets in an inappropriate manner. 

In order to prevent these various risks, Societe Generale has implemented an oversight function, procedures and controls governing the administration of “SGI” indices, compliant with the European Regulation 2016/2011 of 8 June 2016 concerning the indices used as benchmarks. 

The following measures are implemented to address these conflicts of interest risks:

  • The determination of the level of the “SGI” indices is assigned (i) to calculation agents independent of Société Générale SA (ii) or to a calculation agent situated within an independent department from MARK (iii) or to a valuation system within MARK with the appropriate conflict of interest mitigation.
  • Any change of index composition is (i) either rule-based and determined according to the formulas and process documented in the index rules with no discretionary intervention from MARK (in the case of systematic indices) or (ii) performed on the basis of recommendations provided by external independent index advisors or index advisors  within SG group but independent from the dealing room of MARK (in the case of advised indices).
  • The rules governing the indices are made available to users, either on the SGI website or, depending on the case, provided individually to the user.
  • Proposed changes to the index rules are subject to prior approval of a committee composed of the head of “SGI” and the compliance officers in charge of following SGI activities who belong to the Societe Generale SA Compliance department, which is independent of MARK and of the index administration function. This committee, on an ad hoc basis, will decide (i) whether to  amend the index rules and (ii) the notification procedure in the event of a change.
  • Advisors are subject to a due diligence process which focuses on the licenses (e.g. collective management) they have and their level of expertise.

A dedicated department within the Societe Generale Compliance department carries out controls on the transactions conducted by the MARK trading teams, in accordance with Societe Generale’s regulatory obligations in order to detect risks of market abuse that could be generated by these operations.

 

 

Client complaints

Stakeholders may register complaints in respect of any SGI Index with the Index Sponsor  mark-clientclaims.world@sgcib.com

Complaints may relate to, among other things: (a) whether determinations made in respect of an SGI Index and the Index Components are representative of market value; (b) modifications to the Index Rules and SGI Global Methodology; (c) the manner of application of the Index Rules and/or SGI Global Methodology in respect of a particular determination under an SGI Index; and (d) any other decisions or matters in relation to the maintenance and calculation of an SGI Index.

In respect of each complaint received by the Index Sponsor, the complaints procedure shall be managed by Société Générale personnel independent of those who may have been involved in the subject matter of such complaint.