The Executive Board of SIX Swiss Exchange has adjusted the regulations governing the SMI Index Family following a market consultation and at the recommendation of the Index Commission. The weighting of the largest shares in the SMI is now to be capped at 18%. At the same time, a new index is to be launched in which the weightings continue not to be capped. The amendment to the regulations enters into effect on 18 September 2017 and is be applied subject to transitional provisions.
SIX Swiss Exchange conducted a market consultation on the regulations governing the SMI. It revealed that issuers of financial products and users of index derivatives in particular were in favor of introducing a change in the SMI's methodology that would involve the capping of the weighting of the largest shares. Shares with weightings in excess of 18% of the SMI are now to be capped at 18% at the quarterly index reviews. As soon as the weightings of two shares in the index exceed 20%, they will be reduced to 18% during the index reviews. The amendment to the regulations will enter into effect on 18 September 2017 and be applied subject to transitional provisions. These provide for a gradual reduction in the weightings of the largest index components: they will be reduced by 3% each quarter until reaching a maximum of 18% of the SMI.
The amendment to the regulations brings the SMI into line with the diversification limits stipulated by the ESMA – UCITS Directive and permits it to be used as a reference index for the Swiss equity market and European Union.
The consultation also revealed that some users continue to require a non-capped index. SIX Swiss Exchange is consequently launching a new index in conjunction with the regulatory amendment. While its composition will correspond to that of the SMI, it will not be subject to capping.
SIX Swiss Exchange is one of the most important European stock exchanges It offers outstanding liquidity in trading of Swiss securities and connects companies from around the world with international investors and trading participants. As a self-regulated exchange, it is able to provide particularly market-friendly conditions for listing and trading in Swiss and foreign equities, bonds, ETFs, ETPs, funds, and structured products. SIX Swiss Exchange multiples the locational advantages of the Swiss financial center with first-class services and is an ideal listing location for companies of every origin, size and sector. It operates its own range of indices, which includes the SMI®, Switzerland’s most important equity index. www.six-swiss-exchange.com
SIX operates the infrastructure underpinning the Swiss financial sector and offers a comprehensive range of services around the world in the fields of securities trading and settlement, financial information and payment transactions. The company is owned by its users (approximately 130 banks of various orientation and size). Its workforce of over 4,000 employees and presence in 25 countries throughout the world generated operating income of CHF 1.8 billion and a Group net profit of CHF 221.1 million in 2016. www.six-group.com