Following the 14-year jail sentence of a former City of London trader convicted of rate-fixing, basing indexes on bank-supplied estimates has had its day, the chief executive of the London Stock Exchange Group told CNBC on Wednesday.
"The days of survey-based indices are over," CEO Xavier Rolet told CNBC, after the stock exchange and financial information company posted a boost in first half earnings.
"We are in the process of moving from the old days, where, if you want, these indices and these benchmarks were computed in a survey-based fashion between individuals communicating judgment-based opinion as to where they should be, to an electronic world… where everything is electronic, can be traced, can be audited."
Tom Hayes was sentenced in London on Monday for conspiring to manipulate Libor, or the London interbank lending rate, which is used as the basis for setting financial contracts around the world. It is based on the rate at which leading banks are willing to lend to one another.
Libor is calculated using estimates submitted by banks, rather than actual transactions. UBS, Barclays Bank and JPMorgan among others have been fined over the last three years for allegedly submitting rates that differed from their real estimates.
Rolet said that the U.K. had laid down clear rules about what constituted unacceptable practice in the City of London and that none of the LSE's FTSE and Russell Indexes were opinion-based.
"There is no manipulation involved and I think the clarity and the transparency of the model will help underpin a much more solid risk benchmark world in the future," he told CNBC.
LSE Group said pretax profit for the first half of the year rose 21 percent, aided primarily by robust growth in its global indexes business FTSE-Russell.
The company is Europe's oldest independent bourse and owns Borsa Italiana, MillenniumIT, Russell Investments and the London Stock Exchange.
In the first six months of the year, it saw positive underlying results in its information services products, capital markets and Italian post trade divisions.
The 214-year-old exchange group said it would pay an interim dividend of 10.8 pence, up from 9.7 pence last year.