Expansion to 40 values Deutsche Börse plans major DAX reform… More choice and stricter rules: Deutsche Börse wants to improve the image of the stock market. Investors should also have their say.
Deutsche Börse is proposing an increase in the Dax from 30 to 40 companies and is planning stricter requirements for membership in the leading German index. “It’s no secret that I personally would welcome the expansion of the Dax 30 to a Dax 40,” said CEO Theodor Weimer on Monday. At the same time, the MDax small cap index, which was expanded just a few years ago, is set to shrink from 60 companies back to 50 companies.
Expansion to 40 values Deutsche Börse plans major DAX reform
Investors now have until November 4th to comment on whether they support the proposals. “I am looking forward to the result and am sure that the further development of the criteria will help the German capital market to achieve further quality.”
With the planned changes, the exchange is also reacting to the Wirecard scandal and tightening the requirements for membership. The most important points include…
- Companies should be able to be banned from the Dax if they do not submit their figures on time.
- Only demonstrably profitable companies should be able to move up to the first German stock exchange league – a requirement that would have prevented the food delivery service Delivery Hero from rising to the Dax.
- Companies that make more than ten percent of their sales with businesses that are controversial in society should be excluded. Weapons are mentioned here as an example.
- An audit committee of the supervisory board, which monitors the accounting, for example, should be mandatory for membership in the Dax selection indices (Dax, MDax, TecDax, SDax).
In future, the exchange plans to review the index composition every six months instead of once a year. The reason was said to be able to implement changes in the capital market landscape more quickly in the Dax.
Deutsche Börse plans to publish the results of the market consultation before November 23. Changes to the rules should take effect for the review from March 2021 at the earliest.
Expansion to 40 values Deutsche Börse plans major DAX reform for Source: https://www.reuters.com/