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Index Change Advice – 20180628 FTSE JSE Ground Rules Treatment of Suspensions
Treatment of Company Suspensions - FTSE/JSE Ground Rules
28 June 2018
In response to feedback from the January 2018 consultation on the Treatment of Suspensions, the FTSE
Russell Product Governance Board has approved the following methodology change which is effective
immediately (changes are highlighted in bold).
6.5 Suspension of Dealing*
6.5.1 In the event that a constituent of a FTSE/JSE Africa Index, other than the FTSE/JSE Top 40
Index, is suspended, the constituent may remain in the FTSE/JSE Africa Index, at the price at which it is
suspended, for up to 20 business days, whilst a suspended constituent of the FTSE/JSE Top 40 Index
may remain in the Index for up to five business days. During this time FTSE/JSE may delete the
constituent immediately at zero value in cases it is expected that the constituent will not recommence
trading.
• If a constituent is declared bankrupt, placed under curatorship, business rescue or placed in
provisional liquidation, the last traded price will be adjusted down to zero value and it will subsequently
be removed from the index with appropriate notice (typically T+2).
• In all other cases, if the company is a constituent of the Top 40 index, the constituent will continue to
be included in the index for a period of 5 business days, If the constituent continues to be suspended at
the end of that period, it will be removed from the index with T+2 notice at the last traded price.
• In all other cases, the constituent will continue to be included in the index for a period of up to 20
business days at its last traded price.
• If the constituent continues to be suspended at the end of that period, it will be subject to review and
a decision will be taken to either allow the constituent to remain in the index for a further period of up to
20 business days or to remove it at zero value. In making this determination, FTSE/JSE will take into
account the stated reasons for the suspension. These reasons may include announcements made by the
company regarding a pending acquisition or restructuring, and any stated intentions regarding a date for
the resumption of trading.
• If the suspension period reaches 60 business days the constituent will be removed from
the index at zero value at the next index review, subject to the 60th business day of
suspension occurring on or before the Friday which falls four weeks prior to the index review
implementation date. Where the 60th business day of suspension falls after such date the
constituent will be reviewed for removal at a subsequent index review.
• In certain limited circumstances where the index weight of the constituent is significant and FTSE/JSE
determines that a market-related value can be established for the suspended constituent, for example
because similar company securities continue to trade, deletion may take place at the market-related
value instead. In such circumstances, FTSE/JSE will set out its rationale for the proposed treatment of the
constituent at the end of the 60 business day period.
• If following the end of the 60 business day period, a suspended constituent resumes
trading in advance of the index review lock-down period (i.e. the two week period prior to the
index review effective date) in March, June, September or December, the deletion notice will
be rescinded and the constituent will be retained in the index. However, where the constituent
resumes trading during the index review lock-down period, the constituent will continue to be
removed from the index as previously announced, but in these circumstances the deletion will
instead be implemented at market value unless there are barriers that render a market value
irreplicable. In this event, the company will continue to be removed at zero.
• If a constituent has been removed from the index and trading is subsequently restored, the
constituent will only be re-considered for inclusion after a period of 12 months from its deletion. For the
purposes of index eligibility it will be treated as a new issue.
*The Suspended Companies policy also applies to constituents which have a price that FTSE/JSE
considers to be unreliable. This includes Indonesian constituents that have reached the minimum
allowable trade price of IDR 50 per share.
An updated copy of the Corporate Actions and Events Guide for Market Capitalisation Weighted Indexes
(v3.7) is now available on the FTSE Russell website: www.ftserussell.com
For further information please contact FTSE Russell Client Services at info@ftserussell.com 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
Alternatively please visit our website at www.ftserussell.com
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Date: 28/06/2018 05:10:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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