Paul Hoff, managing director, Asia Pacific, FTSE Group, talks about going back to basics and new developments in data delivery.

What are the biggest challenges you face going forward in 2009? Is it competition, the markets, technology, or something else?

FTSE has built a solid business and is well positioned to face the challenges of the year ahead. The biggest challenge we are all perhaps facing is how long and deep the current downturn is, restoring sentiment in the markets and how this effects product issuance and asset growth. However, this challenge is turning into an opportunity for FTSE as investors are now steering towards very transparent simple structures to dip their toe in the water again, which index-linked products are ideal for.

Certainly, we are seeing increased competition in Asia in the index business. Several index providers are expanding their business beyond the US and Europe and setting up shop in Asia such as in Singapore and Hong Kong. We also face increased competition from local index providers who are markets specialists in say China or Hong Kong. However, FTSE is a strong competitor and has carved out quite a specialist approach to Asian equities through the many exchange partnerships we have. For example, we work closely with the exchanges in Singapore, Malaysia, Thailand and Taiwan and are seeing complete transitions to the market benchmark being solely calculated by FTSE (STI and KLCI).

As a result of the volatile trading experienced in global markets the performance of FTSE and other leading market measures have been front page news in the last few months, so what developments and enhancements as regards accurate and timely information can market participants expect to see from you in 2009?

In addition to rolling out new indices which reflect new investment opportunities, trends or asset classes, FTSE is committed to ensuring we provide accurate, timely and reliable delivery of this data. As a result, we are currently working on several projects which enhance our data delivery and capabilities. In addition to those projects, FTSE is developing its quant capabilities following the purchase of PBC, as US based quant shop, to deliver new solutions to its clients. FTSE will integrate PBC's systems and database within its own operational framework to further expand its in-house research capabilities. PBC owner Tom Nadbielny joins FTSE as quantitative research director, and will head the organisation's three regional research teams, based in London, New York and Hong Kong and we look forward to developing this part of the business with him. For example, we are working on a series of short/leveraged indices for Asia as well as some interesting customised quant indices for Japanese clients as a starting point.

Now more than ever investors need a robust country classification system to assign countries to developed, emerging and frontier categories within a global benchmark, so what is the FTSE's stance on this?

FTSE has really been leading the way on how markets are assessed to classify them into Developed, Emerging and Frontier. After an extensive market consultation in 2003, the FTSE Quality of Markets matrix was drawn up and contains 21 criteria under the four categories covering the market, regulatory environment, custody and settlement and so on. This framework has now been extended to provide criteria for what constitutes a Frontier market and how markets. FTSE's clear, transparent and methodical approach to country classification shows that we support having a robust system in place that all markets and investors should be able to see. The framework also provides a flow for how a market might be upgraded or downgraded y being placed on a watch list for further assessment.