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ISEQ 20 change of selection methodology
Introduction
Background
Euronext would like to consult a proposed change of methodology the selection methodology for the ISEQ 20 Index. The changes will imply using a combined ranking of Free Float Market Capitalization and Turnover to perform the selection, instead of two separate rankings.
In addition 12months turnover will be used instead of 3months turnover for this ranking, in order to use more representable view of the trading in the companies.
At Reviews a buffer zone it is proposed to be implemented where current constituents have preference over those that are not currently in the index. For the Annual Review the buffer zone is proposed to be for companies between 19 and 22 and for quarterly reviews between 16 and 25.
Timelines
Stakeholders will have until the 4th of December to react to the consultation, the new rules if validated by the ISEQ Steering Committee will be implemented as of the Annual Review of the ISEQ family in March.
Proposed new rules
Proposed changes highlighted in bold
Ranking Rule
Current Rule |
Proposed Rule |
Selection based on two distinct rankings:
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Selection based on a combined ranking (50%/50%):
In case this would lead to an equal ranking between two Companies, the Company with the highest Free Float Market Capitalisation will rank higher. |
[1] Regulated Turnover consists of value of turnover traded via the Euronext electronic order book as well as the value of turnover from off-exchange transactions within the scope of Euronext’s regulatory environment, such as block trades and the like.
Selection Rules for March review
Current Rule | Proposed Rule |
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Selection Rules for Quarterly review
Current Rule | Proposed Rule |
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