Deutsche Börse extends market consultation on potential rule changes for the MDAX, SDAX and TecDAX indices

One of the proposed changes includes eliminating the tech and classic classification. This would mean that companies classified as tech could be simultaneously entered in the TecDAX as well as the MDAX or SDAX in the future. Another would be that DAX companies allocated to the tech sectors could also be entered in the TecDAX, regardless of their size or liquidity. The aim of the revision is to bring the rules in line with current international standards.

In addition, an expansion of the MDAX, SDAX and TecDAX is being reviewed. As a result of the variety of responses from the market, the alternatives envisaged have been broadened as follows: in addition to the initially proposed increase in the number of MDAX and SDAX constituents from currently 50 each to 60 each, the idea of expanding the MDAX to 60 and the SDAX to 70, or both the MDAX and the SDAX to 70 each are being considered. Independently also under consideration, is the possibility of raising the number of TecDAX constituents from the current 30 to 40.

Deutsche Börse has decided to extend the consultation until 4 May in order to take all market participants’ opinion of the proposed alternatives into account. Deutsche Börse will provide information on the results by 18 May 2018 at the latest.

Moreover, publication of what is known as “shadow indices” simulating the behaviour of the MDAX, SDAX and TecDAX under the potential new rules is scheduled to start from 4 June 2018. Historical back-calculations form the basis of the calculations that are for informational purposes only. However, they do not yet provide any information on the future composition of the indices, which would become effective from 24 September.

The documents to the extended market consultation can be found here.