Index Rules
If a merger or takeover results in one constituent in the FTSE 100 or FTSE 250 being absorbed by another constituent, the resulting company will remain a constituent of the appropriate index, and a vacancy will be created. This vacancy will be filled by selecting the highest ranking security in the appropriate Reserve List as at the close of the index calculation two days prior to the deletion and related indices adjusted.
If a constituent company in the FTSE 100 or FTSE 250 is taken over by a non-constituent company, the original constituent will be removed and replaced by the highest ranking non-constituent on the appropriate Reserve List. Any eligible company resulting from the takeover will be eligible to become the replacement company if it is ranked higher than any other company on the Reserve List.
If a constituent company is split to form two or more companies, then the resulting companies will be eligible for inclusion as index constituents in the appropriate FTSE Actuaries UK Share Indices. Their eligibility will be based on their respective full market capitalisations i.e. before the application of any investibility weightings, and if they qualify in all other respects, e.g. a FTSE 100 constituent split into two companies may result in one or both of these companies remaining in the FTSE 100. Where both of these companies remain in the FTSE 100, the smallest FTSE 100 constituent will become a constituent of the FTSE 250 and the lowest ranking constituent in the FTSE 250 will, in turn, become a constituent of the FTSE SmallCap. Companies resulting from a split that are smaller than the lowest ranking FTSE 250 constituent, will become a constituent of the FTSE SmallCap if their respective full market capitalisations are equal or greater than 0.1% of the full market value of the FTSE SmallCap index i.e. before the application of any investibility weightings. If smaller than 0.1% they will be added to the FTSE Fledgling index.
If a constituent is delisted, ceases to have a firm quotation, is subject to a takeover offer which has been declared wholly unconditional or has, in the opinion of the Chairman and Deputy Chairman of the FTSE Europe/Middle East/Africa Regional Committee (or their nominated deputies), ceased to be a viable constituent as defined by the Ground Rules, it will be removed from the list of constituents. In the case of the FTSE 100 and the FTSE 250 the constituent will then be replaced by the highest ranking company eligible in the appropriate Reserve List as at the close of the index calculation two days prior to its deletion.
Where the company to be removed is a constituent of the FTSE 100, the replacement company will be taken from the highest ranking company on the FTSE 100 Reserve List and a constituent removed from the FTSE 250 will be replaced by the highest ranking company on the FTSE 250 Reserve List. The company removed from the FTSE SmallCap will not be replaced. In all cases, the replacement company will be the highest ranking company on the appropriate Reserve List that is eligible for insertion in the index requiring a constituent.
Index constituent changes resulting from the split will be determined based on market values at close on the day of the split. The changes will then be applied one day later (i.e. using prices as at close the following day). Consequently the FTSE 100 and FTSE 250 may have more than 100 or 250 companies (respectively) for 2 days.