FTSE Country Classification

FTSE recognises the importance of the application of a transparent, objective and consistent approach when assigning the market status of countries as developed or emerging.

In 2003, FTSE conducted a widespread market consultation which resulted in the development of a framework and criteria for assigning countries based on:

• Economic size
• Wealth
• Quality of markets
• Depth and breadth of markets

FTSE applies this framework to conduct an annual review of the market status of all countries into Developed, Advanced Emerging or Secondary Emerging. Any changes to a country’s status will be subject to at least six months' notice.

In order to ensure that the potential reclassification of countries is transparent to investors we have created a Watch List of counties that may be subject to a change in their classification if a number of set conditions are met. The Watch List is reviewed annually by the FTSE Policy Group. A full list of countries and their current classification can be viewed in the May 2008 Country Classification Update.

September 2007 Country Classification Review

At the September 2007 Country Classification Review, the FTSE Policy Group has approved the following changes to the designation of countries in the FTSE Global Equity Index Series:

• Israel will be promoted to Developed status;
• Hungary and Poland will be promoted to Advanced Emerging status.

Implementation of these changes will take place as follows:

• Israel will be will be added to all FTSE Developed custom and standard indices from September 2008;
• Hungary and Poland will be added to all FTSE Advanced Emerging custom and standard indices from September 2008.

For a current update on FTSE's Country Classification programme, including the full list of Watch List countries, please download the May 2008 Country Classification Update.