What we do · Index and benchmark licensing
License the benchmarks you use.
Retire the ones you don’t.
Index providers charge on usage: funds, sleeves, product wrappers, AUM tiers, and ETF flags. Paraxis reconciles the benchmark inventory against the portfolios and products that actually consume it, so the licensed footprint matches the consumed footprint and unused families are retired at the next renewal.
The benchmark line
Why the benchmark line only goes up.
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Usage-based pricing without a usage record
Index licenses are priced on AUM tiers, product counts, and distribution rights, but few firms keep a record that ties each index family to the funds, sleeves, and products that reference it. The provider’s invoice becomes the inventory.
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Families that outlive the strategy
A benchmark licensed for a fund that merged or closed stays on the invoice until someone notices. Product launches add families; product closures rarely remove them.
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Models that punish growth
ETF and direct-indexing licensing models scale with success. A fee schedule that made sense at launch can become the largest single line in the data budget without anyone having decided it should.
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Derived and machine use
Custom indices, derived benchmarks, model inputs, and machine-consumer use sit in licensing categories the original agreement may not cover, and index owners now audit for them.
The methodology
Four steps to a reconciled footprint.
- 01
Benchmark inventory
Every index family, provider, and license term, tied to a named owner.
- Inventory across S&P, MSCI, FTSE Russell, Bloomberg, ICE, and STOXX
- License terms: creation, distribution, derived-index, and machine use
- Fee model per family: AUM tiers, product counts, ETF flags
- Contract notice and true-up dates captured
- 02
Usage verification
Each family matched to the funds, sleeves, and product wrappers that actually reference it, and to the documents that name it.
- Portfolio and product references reconciled to the license
- Prospectus, factsheet, and marketing use identified
- Derived and custom index use surfaced
- Model and machine-consumer inputs traced
- 03
Rationalization
Unused and duplicated families retired ahead of renewal; fee models normalized so the firm pays on what it uses.
- Retirement list sequenced with notice dates
- Fee-model normalization across AUM tiers and product counts
- Consolidation where two providers cover one need
- Compliance gaps corrected before an index-owner review
- 04
Renewal and audit posture
The reconciled inventory becomes the negotiating position at renewal and the evidence file for an index-owner licensing review.
- Renewal targets tied to verified usage
- Licensing compliance across creation, distribution, derived, and machine use
- Audit posture for provider reviews
- Handover to the standing entitlement file
What the work produces
The licensed footprint matches the consumed one.
- Reconciled
Every renewal cycle
Benchmark inventory matched to portfolio and product usage before the provider proposes its number.
- Retired
Unused families
Families with no referencing fund, sleeve, or product removed ahead of renewal.
- Normalized
Fee models
AUM tiers, product counts, and ETF flags read consistently across providers.
- Documented
Derived and machine use
Custom, derived, and model uses licensed explicitly rather than discovered in a review.
Who we work with
Wherever a benchmark line grows faster than AUM.
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Asset managers and ETF issuers
Index, benchmark, and reference data costs rising faster than AUM, and licensing models that scale with product growth.
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Asset owners and OCIO platforms
Benchmarks licensed across mandates and sleeves, with usage that changes every time a manager or mandate does.
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Wealth and direct-indexing platforms
Account-level index use at scale, where the licensing category and the fee model were written for a different product.
Questions we get asked
Six questions, answered before the provider’s review.
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Which index providers does this cover?
S&P Dow Jones, MSCI, FTSE Russell, Bloomberg, ICE, STOXX, and the smaller and custom providers a firm licenses. The reconciliation method is the same for each; the fee models and audit practices differ.
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How do you know which funds actually use a benchmark?
By reading the documents that reference it: prospectuses, factsheets, mandates, and marketing material, alongside portfolio and performance systems. A benchmark that no document and no system references is a candidate for retirement.
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Can we retire a family mid-term?
Usually not without cost, which is why retirement is sequenced with the notice and true-up dates in the contract. The inventory tells you what to retire; the calendar tells you when.
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Do index owners really audit?
Yes, and increasingly. Index-owner licensing reviews look for use beyond the licensed category: distribution, derived indices, custom benchmarks, and machine consumers. A reconciled inventory is the evidence file for that review.
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What about custom or blended benchmarks?
They usually sit in a derived-index category with its own terms and fees. The reconciliation identifies every custom and blended benchmark in use and matches it to a license, or flags the gap before the provider does.
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Is this part of the Speedway Assessment?
The index and benchmark inventory is one of the areas the Speedway Assessment baselines. Firms with a large benchmark line often start there and run the full reconciliation as a follow-on.