Financial information services provider Markit, which acquired the Halifax House Price Index from Lloyds Banking Group last month, will update UK providers with products linked to the index by the end of 2015.

Markit acquired the index and all associated intellectual property at the end of March, and will also become the index administrator after a transition process.

To ensure a smooth transition, the index name and methodology will remain unchanged when the transaction completes, which is expected later this year, said Luke Thompson, managing director and head of market economics at Markit.

“Markit is currently transitioning the calculation and administration of the HPI from Halifax, a process we expect to complete around end of 2015,” he said. “Markit will provide details of licensing terms for the HPI to all users, including those producing structured products in advance of that date.”

Once the acquisition and transfer is completed, Markit will calculate and administer the Halifax House Price Index in compliance with the Iosco Principles for Financial Benchmarks, while Lloyds Banking Group will be the submitter to the Halifax House Price Index in compliance with the same principles. Lloyds Banking Group already works with Markit on the Lloyds Bank Regional Purchasing Managers’ Index.

Markit’s acquisition responds to the firm’s expansion of its index catalogue as explained by Tim Sargent, managing director and global head of indices at Markit, who stated that the firm will work with the industry on opportunities to develop financial products based on the housing market.

Markit is an independent provider of fixed income and macroeconomic indices, calculating more than 14,000 indices around the world. The company’s indices include the iBoxx fixed income index family, which has been featured in over 600 products across markets, and the Purchasing Managers’ Index (PMI) series, used to track economic activity in over 30 countries.

Halifax has been publishing the index monthly since 1983 and will continue to do so on behalf of Markit.

The Halifax House Price index has been used in the UK retail structured products market since 1999 and has featured in over 180 products mainly marketed by building societies. SRP data shows that there are 31 live products linked to the performance of the HPI of which 20 were sold by Santander UK subsidiaries including Santander Bank, Alliance & Leicester and Abbey. Other UK providers with live products linked to the HPI include Intelligent Money and defunct distributor Jubilee Financial Products with four products apiece, as well as Arc Capital & Income (a product now managed by Reyker), Mattioli Woods and a 15-year uncapped call deposit sold by Saga in 2003.

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