The NASDAQ OMX Group, Inc. (Nasdaq:NDAQ) today announced changes to a number of its indexes. After substantial research and consideration, NASDAQ OMX® decided to enact changes in its special dividend policy across all indexes calculated in the U.S. (including NASDAQ®-, NASDAQ OMX®- and PHLX®-branded indexes), the seasoning criteria of certain indexes, and the evaluation schedule for the family of NASDAQ OMX Green Economy Indexes.
Currently, in the case of a special cash dividend, a determination is made on an individual basis whether to make an adjustment to the Last Sale Price of an Index Security on the ex-date of the dividend. Following the methodology change, a special cash dividend announced by the listing exchange for an Index Security will result in an adjustment to the Last Sale Price of the security prior to market open on the ex-date for the special dividend amount. Special cash dividends may also be referred to as unusual, extraordinary, one-time, non-recurring, etc. The change to this policy will be implemented on Tuesday, May 1, 2012.
In addition, NASDAQ OMX is changing and applying consistently the "seasoning" period for NASDAQ-100 Index® (NDX), NASDAQ Financial-100 Index® (IXF) and NASDAQ Biotechnology Index® (NBI) eligibility. Currently, the NDX and IXF seasoning criteria require a security to be listed on a recognized market for at least two years (NBI requires six months); in the case of spin-offs, the operating history of the parent will be considered. If a security would otherwise qualify to be in the top 25% of the securities included in the Index by market capitalization for the six prior consecutive month-ends, then a one-year seasoning criterion would apply.
With the new methodology, a security must have seasoned on NASDAQ, NYSE or NYSE Amex for at least three full months (excluding the first month of initial listing) based on current month-end data. The index eligibility changes will be implemented on Monday, April 23, 2012.
NASDAQ OMX is also changing the annual evaluation of its family of NASDAQ OMX Green Economy Indexes, to be effective after the close of trading on the third Friday in June (June 15, 2012), in conjunction with the quarterly rebalance. The evaluation will use eligibility criteria applied through the end of April. The quarterly rebalance will continue to use eligibility criteria through the end of May, with all changes becoming effective after the close of trading on Friday, June 15, 2012.
For more details about index methodology, including that of the NASDAQ-100 Index - the basis of the PowerShares QQQ Trust (Nasdaq:QQQ) - please visit the NASDAQ OMX Global Index website a twww.nasdaqomx.com/indexes.