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The first rule change concerns the way company take-over are dealt with. Rule 5.3.3 currently states (among other things) that if a a take-over bid is accepted during regular trading hours, the index will be adjusted effective the next trading day. This rule will be changed resulting in a three days notification period for all types of take-overs. The rule currently reads:
"If it transpires that trading in the security referred to in article 5.3.2 stops permanently on its primary market, the security in question will be removed from the index. If the security is no longer traded during regular daytime trading in officially listed shares or if a take-over bid for the acquisition of the relevant company is accepted, the compiler of the EPRA Index may decide to remove the security from the relevant index, provided that this is announced at least three trading days in advance. If the take-over bid is accepted during regular daytime trading hours this will result in the index being adjusted with effect from the next trading day. If the take-over bid is accepted outside regular daytime trading hours this will result in the index being adjusted with effect from the second trading day after the bid was accepted. For the purposes of these rules a trading day is considered to be that part of the day that the index is officially open."
The underlined section will be deleted.
The second rule change concerns rule 5.3.8, which deals with stock dividends, bonus dividends or bonus issues. This rule will be changed so that special dividends are also included in this rule. Rule 5.3.8 currently reads as follows:
"In the event of a stock dividend, bonus dividend or bonus issue, the divisor of the EPRA Index will not be adjusted unless the compiler of the index decides the issue is structured in such a way the underlying principles and accuracy of the index are effected. To determine whether a bonus dividend exists the basic principle will be whether the company treats it as a bonus dividend and publishes it as such. The compiler will make the final decision if there is any doubt."
The first sentence will be replaced with "In the event of a stock dividend, special dividend, bonus dividend or bonus issue, the divisor of the EPRA Index will not be adjusted unless the compiler of the index decides the issue is structured in such a way the underlying principles and accuracy of the index are effected."
These rule changes will come into effect on 1 September 2001.
The European Public Real Estate Association in conjunction with Euronext Indices B.V. calculates and publish the EPRA Index. Euronext Indices BV announce on a quarterly basis the outcome of the periodic review of the index. Euronext Indices BV calculate the index every 15 seconds making the EPRA Index Europe's first real time index focused on the European real estate sector.
The European Public Real Estate Association exists to promote and develop the European quoted real estate sector. Some of the ways in which the association seeks to achieve this objective are:
- the establishment of an active forum;
- the promotion of common standards of "best practice" across the industry-liaison with government and regulators;
- the establishment of the information function.
