General SENS Submitter Company - Informative Notice 20210820 Market Consultation Capping Factor Adjustment for Capped SWIX Indices

Informative Notice – 20210820 Market Consultation Capping Factor Adjustment for Capped SWIX Indices

                  Capping Factor adjustment for Capped SWIX indices
                            FTSE/JSE Africa Index Series

                                                       20 August 2021
 On 6 July 2021, FTSE/JSE re-opened the consultation into the capping methodology applied in the
 FTSE/JSE Africa Index Series. Comments, submissions and responses were requested to be submitted
 to the JSE on or before 20 July 2021. FTSE/JSE is appreciative of all the responses and input received
 during this consultative process.

 Responses to this consultation request indicate that there has been an increased convergence of opinion
 amongst index users around the most appropriate approach to take to the capping methodology. In
 particular, a significantly high proportion of index users consider Naspers and Prosus jointly when
 evaluating concentration risk in their portfolios. However, some arguments require further consideration
 before a permanent solution can be determined, as well as a careful consideration for unintended
 consequences.

 FTSE/JSE further takes note of the announcement by Prosus on 13 August 2021 declaring their exchange
 offer to Naspers shareholders unconditional. Under the current capping methodology, this will see the
 combined weighting of Naspers and Prosus increase in the capped SWIX indices by around half their
 current weight. After careful consideration of all the facts, information and submissions, FTSE/JSE is of
 the view that it is important to avoid a temporary structural dislocation in index weightings. In these
 circumstances, FTSE/JSE will apply an interim adjustment from the September 2021 index review to
 maintain the current equilibrium.

 With effect from the September 2021 index review, the capping level for the following two indices only
 will change from 10% to 6%:
                 J433 – FTSE/JSE Capped SWIX All Share Index
                 J430 – FTSE/JSE Capped SWIX Top 40 Index

 This interim measure is intended to align the combined weighting of the two companies in these indices
 to the prevailing weights.

 In order to reach a permanent solution as quickly as possible, FTSE/JSE will publish a white paper to the
 market in August 2021 that presents the arguments received during both consultation processes,
 concerns around unintended short-term consequences, and a numerical assessment of the situation.
 FTSE/JSE will invite discussion or written submissions from interested parties to engage on any of the
 white paper content.




For further information please contact FTSE Russell Client Services at info@ftserussell.com or indices@jse.co.za or call:

 Australia              +1800 653 680
 Hong Kong              +852 2164 3333
 Japan                  +81 3 4563 6346
 London                 +44 (0) 20 7866 1810
 New York               +1866 551 0617

 JSE Limited            +27 11 520 7000


Alternatively please visit our website at www.ftserussell.com or www.ftsejse.co.za

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Date: 20-08-2021 05:30:00
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