| Fri 18 Dec 2020, 17:10 | | Index Change Advice - 20201221 FTSE/JSE Ground Rule Update |
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Index Change Advice - 20201221 FTSE/JSE Ground Rule Update
FTSE JSE Africa Index Series: Ground Rule Update
18 December 2020
FTSE Russell would like to inform clients that the Ground Rule for the FTSE JSE Africa Index Series
have been updated this change will be effective from 18 January 2021.
Section 6: Changes to Constituent Companies
The Suspended Companies rule has been updated as follows:
6.5 Suspension of Dealing
1.1 In the event that a constituent of a FTSE/JSE Africa Index, other than the FTSE/JSE Top 40 Index, is
suspended, the constituent may remain in the FTSE/JSE Africa Index, at the price at which it is suspended,
for up to 20 business days, whilst a suspended constituent of the FTSE/JSE Top 40 Index may remain in the
Index for up to five business days. During this time FTSE/JSE may delete the constituent immediately at
zero value in cases it is expected that the constituent will not recommence trading. If a constituent is
declared bankrupt, placed under curatorship, business rescue or placed in provisional liquidation, the last
traded price will be adjusted down to zero value and it will subsequently be removed from the index with
appropriate notice (typically T+2).
* If the company is a constituent of the Top 40 index, the constituent will continue to be included in the
index for a period of five business days, If the constituent continues to be suspended at the end of
that period, it will be removed from the index with T+2 notice at the last traded price.
* In all other cases, the constituent will continue to be included in the index for a period of up to 20
business days at its last traded price.
* If, following review once a constituent has been suspended for 20 business days, a decision is taken to
remove the constituent, FTSE Russell will provide notice (via an Informative Notice) of 20 business
days (the notice period) that it intends to remove the constituent, at zero value, at the conclusion of
the notice period*. If the security has not resumed trading at the conclusion of the notice period, it
will be removed with two days’ notice.
*If during the notice period further details are disclosed as to the reason for a company’s suspension,
those reasons (and any possible resumption of trade date) will be taken into account when
determining if the company should remain on notice.
• If the suspended company resumes trading prior to the expiry of the notice period, the company
will remain in its indexes as normal.
• If during the notice period further details are disclosed as to the reason for a company’s
suspension, those reasons (and any possible resumption of trade date) will be taken into account
when determining if the company should remain on notice.
* If a suspended constituent resumes trading on or before the last business day of the notice period, the
deletion notice will be rescinded and the constituent will be retained in the index. However, where
the constituent resumes trading after the 40th business day of suspension, the constituent will
continue to be removed from the index as previously announced but in these circumstances the
deletion will instead be implemented at market value unless there are barriers that render a market
value irreplicable. In this event, the company will continue to be removed at zero.
* If the notice period expires in the week preceding an index review, the company will be removed at
zero value in line with the review date (subject to it not resuming trading during that week). In certain
limited circumstances where the index weight of the constituent is significant and FTSE/JSE
determines that a market-related value can be established for the suspended constituent, for example
because similar company securities continue to trade, deletion may take place at the market-related
value instead. In such circumstances, FTSE/JSE will set out its rationale for the proposed treatment of
the constituent at the end of the suspension period. The company would then be removed at that
value at the end of the notice period.
* In certain limited circumstances where the index weight of the constituent is significant and FTSE/JSE
determines that a market-related value can be established for the suspended constituent, for example
because similar company securities continue to trade, deletion may take place at the market-related
value instead. In such circumstances, FTSE/JSE will set out its rationale for the proposed treatment.
The company would then be removed at that value at the end of the notice period.
* If a constituent has been removed from the index and trading is subsequently restored, the
constituent will only be re-considered for inclusion after a period of 12 months from its deletion. For
the purposes of index eligibility it will be treated as a new issue.
*The Suspended Companies policy also applies to constituents which have a price that FTSE/JSE considers
to be unreliable.
An updated copy of the FTSE JSE Africa Index Series Ground Rules (Version 7.2) is now available using
the following link FTSE_JSE_Africa_Index_Series_new.pdf or from the FTSE Russell website
www.ftserussell.com
For further information please contact FTSE Russell Client Services at info@ftserussell.com or call:
Australia +1800 653 680
Hong Kong +852 2164 3333
Japan +81 3 3581 2764
London +44 (0) 20 7866 1810
New York +1866 551 0617
Alternatively please visit our website at www.ftserussell.com
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Date: 18-12-2020 05:10:00
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