GEN - FTSE/JSE Africa Index Series - Dividend Withholding Tax in the Total
JSE
GEN
GEN - FTSE/JSE Africa Index Series - Dividend Withholding Tax in the Total
Return Indices
Dividend Withholding Tax in the Total Return Indices - Update FTSE/JSE Africa
Index Series
9 March 2012
On 13 February 2012, FTSE/JSE published an Index Change Advice stating our
intention to calculate all total return indices (TRI) on a net basis from 1
April 2012, and requested feedback from the market in this regard.
The FTSE/JSE Advisory Committee (AC) met on 7 March 2012, where the treatment
of dividend withholding tax in the TRI was discussed at length. The AC took
careful note of the large number of concerns raised by various index users
with the use of a net methodology. In particular:
* a net methodology would reduce transparency and may be misleading for
pension fund investors
* institutional investors including pension funds would need to benchmark
their performance against an independently calculated gross (declared) TRI
index
Given the size of the institutional and pension fund market, the AC feels that
it is more practical to provide a gross index in the immediate term. Based on
this, all FTSE/JSE TRI indices will be calculated using a gross (declared)
rate from 1 April 2012 and NOT a net rate as previously announced.
Furthermore, the AC acknowledges the need for TRI indices calculated on a net
basis in the South African market. FTSE/JSE will investigate the launch of
net TRI indices and will inform the market once timelines have been finalised.
Please address any queries or concerns to indices@jse.co.za
FREE TRIAL OFFER: FTSE offers free one month index trials to interested
clients. For further information or general enquiries please contact us at
info@ftse.com or indices@jse.co.za or call:
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Date: 09/03/2012 13:52:14 Produced by the JSE SENS Department.
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