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ISEQ® 20 Index

Characteristics:
The ISEQ® 20 Index represents the 20 most liquid and largest capped equities quoted on the Irish Stock Exchange. The calculation methodology is based on industry best practice; a model which can be tracked accurately and easily.

The historic time series dates back to 31 December 1997. Both Price and Return (performance) indices are calculated and published. The ISEQ® 20 Index is based at 1,000 on December 31 2004.

Calculation Methodology:
The calculation of the ISEQ® 20 Index differs from the ISEQ® Overall Index.

To allow for easier tracking the following attributes are applied:

Constituents change infrequently. The constituent base is decided upon at set periods following a review of the potential constituent population (more about this below).
Share changes, rights issues, stock splits and entitlement issues are applied at the start of the next chaining period.
In line with industry norms, only order-book trades are included. This aids price formation, transparency, etc.
Only the available constituent free-float shares in issue are included
At chaining points, a maximum weighting of 20% is applied
To view the detailed calculation formulae Click here.

In certain circumstances, the current ISE official closing price includes OTC transactions. As such the price used to calculate the closing index may differ from the official closing price of the constituents. The prices used to calculate the closing index are publicly available at 18:00 Irish local time each day. They are published on the ISE website, by file transfer, e-mail, etc. to the market and press. Contact the Irish Stock Exchange for further details.

ISEQ® 20 Index Inclusion Criteria:

Selection population - What instruments are considered for inclusion ?
All ISEQ Overall Index constituents are included for final consideration by the selection panel. This allows for decisions based upon qualitative factors to be included, whereas a specific mathematical formula alone, such as for the ISEQ Small Cap does not.

Selection Panel - Who decides on the constituents?
The selection of constituents is reviewed by the Selection Panel

Selection criteria - What criteria are to be measured when selecting the constituents?
Market capitalization and order-book turnover are the key criteria. The number of transactions, number of executed orders, and price performance are all valid ranking indicators and are also examined when selecting the constituent base.

Selection frequency - How often are the constituents reviewed?
The review and selection of instruments is a standard periodic task carried out quarterly & annually. This is a separate task to “chaining” discussed below.

Quarterly:
Fast Exit (30/30): Constituents, that rank > 30 in order-book turnover and/or free-float market capitalization, will be replaced, if an inclusion candidate, that ranks <= 25 in both criteria, exists.
Fast Entry (15/15): Non-constituents, that rank <= 15 in order-book turnover and/or free-float market capitalisation, will be included. Excluded then will be the lowest capitalized constituent, which ranks > 25 in one of the criteria. If no such component exists, the lowest capitalized constituent will be excluded.

The Panel reserves the right to review, at its sole discretion the rules and number of constituents at any stage.

Annual:
Regular Exit (25/25): Constituents, that rank >25 in order-book turnover and/or free-float market capitalization, will be replaced, if an inclusion candidate, that ranks <= 25 in both criteria, exists
Regular Entry (20/20): Non-constituents, that rank <= 20 in order-book turnover and/or free-float market capitalization, will be included, if a constituent, that ranks >25 in one of the criteria, exists.

The Panel reserves the right to review, at its sole discretion the rules and number of constituents at any stage.

Additional Rules:
If, when applying the above rules, more than one candidate for inclusion/exclusion exists, then the candidate with the highest / lowest free-float market capitalization will be included / excluded.
To determine the free-float market capitalization the average VWAP (volume weighted average price) of the previous 20 trading days is used in order to avoid manipulation of index decisions.
Takeovers, mergers, new listings and delistings will be dealt with on an ad hoc basis by the Selection Panel.
Changes are applied to the ISEQ® 20 Index two business days following the decision of the Selection Panel to alter the constituent base.
The Panel reserves the right to review, at its sole discretion the rules and number of constituents at any stage.

Free-float calculation - Does the ISEQ® 20 Index include available free-float in issue or all listed shares?
Only free-float shares are included in index calculation and are applied at the start of each chaining period.

When calculating free-float, two types of shareholder are excluded; firstly shares held by interested parties (strategic holdings, directors, employee holdings etc.) and secondly shareholders of a significant portion of the issued shares. Sources of free-float figures include company secretaries, registrars, etc. The ISE has developed a regime for monitoring free float on a quarterly basis.

Weighting limitations - Are weighting restrictions on the constituents required?
It is necessary to cap weightings of constituents within the ISEQ® 20 Index at 20%.

Chaining period - How often will adjustment factors be reset?
As a company issues dividends or experiences corporate actions, the index is kept consistent through the use of adjustment factors. The chaining of an index is where changes to the adjustment factors are reset and any necessary share changes are applied. These chaining adjustments are applied quarterly on the third Friday of March, June, September and December.

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