ZUG, October 5, 2020 – Today, Qontigo’s global index provider STOXX Ltd. launched a market consultation as part of a reform of the DAX Selection Indices. The objective is to introduce extended qualification criteria for index membership in the DAX Selection Indices (DAX, MDAX, SDAX and TecDAX), and to align them with international index standards. High capital market relevance and objectivity must be maintained; at the same time, transparency and predictability must be further strengthened.
Important aspects on which market participants can comment:
Extended qualification criteria:
- Companies must prove their profitability when included in the DAX index
- Requirement of quarterly reporting for inclusion in the DAX index and audited annual reporting in due time for all Selection Indices, with sanctioning options in case of non-compliance up to a deletion from the index (fast exit)
- All members of the DAX Selection Indices must have proof of an audit committee on the supervisory board
- Exclusion of companies with revenues of more than 10% with controversial weapons for inclusion in the DAX Selection Indices
Alignment with international standards:
- Listing on the regulated market of the Frankfurt Stock Exchange mandatory for inclusion in the indices, and therefore decoupling from membership in the premium segment Prime Standard, in order to increase flexibility in the management of index rules
- Regular review every six months instead of annually, to be able to implement changes in the capital market landscape more quickly in the DAX index
Transparency and predictability:
- Consideration of free float market capitalization only, as internationally customary; replacement of turnover ranking in the selection process
- Introduction of a minimum liquidity requirement based on turnover on Xetra/Frankfurt Stock Exchange to ensure tradability
In addition, the market opinion is collected with regards to what the optimal number of constituents for DAX, MDAX and SDAX should be (30/60/70 or 40/50/70).
The consultation is open to all market participants until November 4, 2020, 20.00 CET. Market consultations are mandatory for fundamental rule changes, as defined in the rulebook for the DAX Selection Indices (Section 10.3 Material Changes with Consultation).
- Market consultation
- Rulebook (Guide to the DAX Equity Indices)
- Overview of the segments of the Frankfurt Stock Exchange
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