Special rule for admittance of companies listed on exchanges merging with Euronext.
During the research concerning the consequences of the merger with BVLP, it emerged that in case of a merger, the stocks listed on an exchange which merges with Euronext would possibly have to wait several quarterly reviews before being admitted to the index matching their market capitalisation. The reason is that current constituents of the indices ranking in the top 120 are only removed if this is necessary in view of the automatic inclusion of stocks ranking in the top 80 by market capitalisation. The Euronext Indices Steering Committee therefore has approved a rule which smoothes the entrance of stocks listed on an exchange which merges into Euronext. This new rule provides for the automatic entry into the Euronext 100 Index of stocks listed on such an exchange that rank among the top 100 in terms of market capitalisation. A similar rule change has been approved for the Next 150 Index.
Furthermore, the definition of Euronext has been changed, in order to facilitate possible future expansion. Euronext used to be defined as "the official markets of Euronext Amsterdam, Euronext Brussels and Euronext Paris".
New and amended rules
The Rule changes read as follows:
(Amended text of 1.1)
"The Euronext 100 Index is a market-capitalisation-weighted price index, based on the last trade prices of shares (including depositary receipts for shares) of the 100 highest ranked eligible securities listed on Euronext. Euronext should be read as the official markets operated by the subsidiaries of Euronext N.V."
(Inserted as Rule 5.4 d) )
5.4 The Euronext 100 Index consists of the 100 stocks with the highest market capitalisation from the selection universe as defined under section 1. At the time of the quarterly review the selection universe is ranked according to market capitalisation. The following adjustments are made to the current Euronext 100 Index where applicable:
- Non-constituents can automatically enter the Euronext 100 Index at the time of the quarterly review when they rank in position 1 - 80 inclusive. In cases where the number of automatic inclusions outnumbers the number of exclusions, the lowest ranking security of the Euronext 100 Index will be deleted.
- Current constituents of the Euronext 100 Index are automatically deleted if they fall below position 120 inclusive. The highest ranking security from the selection universe will enter the Euronext 100 Index as the replacement.
- A current constituent stock that fails on a liquidity test (as defined in section 1.5) on two consecutive reviews will be deleted from the Euronext 100 Index.
- Non-constituents with their primary listing on markets that acceded to Euronext can automatically enter the Euronext 100 Index at the time of the first quarterly review after the merger or acquisition has come into effect, when they rank in position 1 - 100 inclusive. In case the number of automatic inclusions outnumbers the number of exclusions, the lowest ranking stock of the Euronext 100 Index will be deleted.
Taking into account the quarterly notification period, these changes will come into effect on 1 April 2002. If the merger with BVLP is concluded in the first quarter of 2002, the new rule will be applied to the stocks currently listed on BVLP.
The Euronext 100 Index and Next 150 Index have been published since 2 October 2000. They are made up of the 250 securities with the highest market capitalisations traded on the official markets of Euronext. In order to be included in the indices the securities must meet liquidity criteria that are specified in the rules of the indices. Euronext Indices B.V. is the compiler of the indices under the supervision of the independent Euronext Indices Steering Committee.
