MSCI Real Estate – BMR property benchmark family - Compliance Statement | May 2024

MSCI property benchmark
family compliance statement
under Article 26(3)of Regulation (EU) 2016/10111
A. General Information
Item
1. Date of creation of the compliancestatement and of the latest update

Text field
Created:13/06/2019
Last updated:
22/05/2024

2. Identity of the administrator

MSCI Limited

This section should identify:•
the non-significant benchmark in respect of which provisions do not apply,•
the provisions that the administrator has chosen not to apply, and•an explanation as to why it is appropriate not to apply each provision.
Each section should be completed for any identified group of non-significant benchmarks provided
by the administrator in respect of which:•the same provisions are not complied with, and•the same explanations for non-compliance apply.

1

Required under Article 26(3) of Regulation (EU) 2016/1011 as it forms part of UK domestic law by virtue of theEuropean Union (Withdrawal) Act 2018.

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B. MSCI Limited chooses not to apply the following provisions of Regulation (EU)2016/1011 with respect to its non- significant benchmarks listed below
3. Identification of benchmarks for which thissection is relevant

The regulated benchmarks included in the
MSCI property benchmark family. All
benchmarks in this family are non-significant.

4. i) clear identification of each single
provision;ii) for each provision listed under point (i),a dedicated, detailed and clear explanationof the reasons why the administrator
considers it appropriate not to comply withthat specific provision

4(i) [Number of the Article and paragraph ofRegulation (EU) 2016/1011 and full text ofeach single provision]
Article 11(3)(b) - Where the input data of abenchmark is contributed from a front office
function, meaning any department, division,group, or personnel of contributors or any of
its affiliates that performs any pricing, trading,sales, marketing, advertising, solicitation,
structuring, or brokerage activities, theadministrator shall:...
(b) ensure that contributors have in place
adequate internal oversight and verification
procedures.

Article 15(2) - The code of conduct shall
include at least the following elements:(a) a clear description of the input data to beprovided and the requirements necessary toensure that input data is provided inaccordance with Articles 11 and 14;(b) identification of the persons that may
contribute input data to the administrator andprocedures to verify the identity of acontributor and any submitters, as well as
authorisation of any submitters that contribute
input data on behalf of a contributor;(c) policies to ensure that a contributor
provides all relevant input data;(d) the systems and controls that a contributor
is required to establish, including:(i) procedures for contributing input data,
including requirements for the contributor to
specify whether input data is transaction data
and whether input data conforms to theadministrator's requirements;(ii) policies on the use of discretion incontributing input data;(iii) any requirement for the validation of input
data before it is provided to the administrator;(iv) record-keeping policies;(v) reporting requirements concerning
suspicious input data;(vi) requirements concerning the managementof conflicts of interest.
Article 16(2) A supervised contributor shallhave in place effective systems and controls to

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Information Classification: GENERALMSCI Real Estate – BMR property benchmark family - Compliance Statement | May 2024

ensure the integrity and reliability of allcontributions of input data to theadministrator, including:(a) controls regarding who may submit input
data to an administrator including, where
proportionate, a process for sign-off by anatural person holding a position senior to thatof the submitter;(b) appropriate training for submitters,
covering at least this Regulation andRegulation (EU) No 596/2014;(c) measures for the management of conflictsof interest, including organisational separationof employees where appropriate andconsideration of how to remove incentives,
created by remuneration polices, to manipulatea benchmark;(d) record-keeping, for an appropriate periodof time, of communications in relation toprovision of input data, of all information used
to enable the contributor to make eachsubmission, and of all existing or potential
conflicts of interest including, but not limited
to, the contributor's exposure to financial
instruments which use a benchmark as areference;(e) record-keeping of internal and external
audits
Article 16(3) Where input data relies on expert
judgement, supervised contributors shallestablish, in addition to the systems andcontrols referred to in paragraph 2, policies
guiding any use of judgement or exercise of
discretion and shall retain records of therationale for any such judgement or discretion.
Where proportionate, supervised contributors
shall take into account the nature of thebenchmark and its input data.
4(ii) [Explanation on the appropriateness ofthe non-compliance for each specific provision]
Article 11(3)(b) - MSCI relies primarily on
voluntary contributions of data by or on behalfof institutional private real estate investors andmanagers, which may or may not be"supervised entities" under the UK and EU
benchmark regulation. The input data for the
MSCI property benchmark family is commercial
property valuations (or when the property issold, the transaction price), and we understandthat property valuations would be considered"contribution[s] of input data” under thebenchmark regulation. MSCI cannot rule out
the possibility that the property valuations may
be delivered to MSCI by personnel who may
also perform "sales" or "marketing" activities,
which potentially may be the case for smaller
data providers. In any event, property
valuations are not created exclusively forbenchmark determination, exist independentlyof the benchmarks, and are used by market
professionals primarily for other purposes,
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Information Classification: GENERALMSCI Real Estate – BMR property benchmark family - Compliance Statement | May 2024

including reporting to investors and fundaccounting. MSCI has chosen not to apply theprescriptive requirements of Article 11(3)(b)for the same reasons as 15(2) below.

Article 15(2) - The MSCI Real Estate Data
Provider Code of Conduct (available on theindex regulation page of MSCI's website athttps://www.msci.com/index-regulation) sets
out the responsibilities, requirements andexpectations of all of our data providers. It
focuses on the data quality and completeness,
which MSCI requires to calculate the MSCI
Private Real Estate Indexes, including theregulated MSCI Property Indexes in the MSCI
property benchmark family.
However, MSCI has chosen not to apply theprescriptive requirements of Article 15(2) topreserve the integrity, coverage,
representativeness of such benchmarks, as
explained below.
MSCI relies on voluntary data contributions byor on behalf of institutional private real estate
investors and managers, and MSCI’s data
providers vary in type and size. While some
may be regulated (including AIFs and othersupervised entities), others are not (including
estates, trusts, charities, managers, etc.).
Instead of expending resources implementing
the processes and procedures in Article 15(2),MSCI’s data providers could simply choose notto provide the data to MSCI. Given thatproperties are unique, real estate investment
data is not interchangeable, and no substitutes
for the data exists, all data is considered
critical for the benchmarks and for measuring
the market. The loss of data would reduce themarket coverage and risk the integrity of thebenchmarks.
By applying proportionality and taking the
exemption, MSCI aims to maintain the data
supply and preserve the integrity, coverage,
and representativeness of the benchmarks.
Further, even though property valuations are
considered under the benchmark regulation tobe “contribution[s] of input data”, they are notcreated exclusively for the purpose ofbenchmark determination, they exist
independently of the benchmarks and they areused by market professionals primarily forother purposes, including reporting to investors
and fund accounting. These data providers
would be obtaining and using property
valuations, whether or not they are providingthem to MSCI.
To further safeguard the quality of thebenchmarks, MSCI applies data validation andverification processes and procedures to thedata provided.
We believe the separate and independent usesof the input data, as well as MSCI’s data
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Information Classification: GENERALMSCI Real Estate – BMR property benchmark family - Compliance Statement | May 2024

validation and verification processes, mitigate
risks associated with contributions of input
data.
Please note that MSCI does not use panels or
surveys to determine input data.
Article 16(2) See the explanation in Article
15(2) above.

Article 16(3) See the explanation in Article
15(2) above.

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MSCI is a leading provider of critical decision
support tools and services for the global
investment community. With over 50 years ofexpertise in research, data and technology, we
power better investment decisions by enablingclients to understand and analyze key drivers of risk
and return and confidently build more effective
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into and improve transparency across theinvestment process.
To learn more, please visit www.msci.com.

The process for submitting a formal index
complaint can be found on the index regulation
page of MSCI’s website
at: https://www.msci.com/index-regulation.

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