Dealers are working amongst themselves and with customers to decide if and when the home equity ABS synthetic index should incorporate more than the 20 deals it currently references. Those interested in either creating a new index product or increasing the number of subprime deals included in each series of the ABX.HE index - perhaps to as many as 50 or 100 - say it is necessary to promote correlation trading. But some worry that changing the index too soon after it began trading in mid-January could cause some investors to pull out.

"Some dealers want to keep it the same because they are concerned about the fact that if they change it, it could affect liquidity, but the other side is that, in the long run, if you need good correlation trading, you're going to need more names in there," said Brian McManus, a senior analyst at Wachovia Securities.

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