Methodology Change | Solactive Australia Benchmark Index Series| Effective Date 17/12/2020

Today, on the 14/12/2020, Solactive announces the following changes to the methodology of the following index/Indices (the ‘Affected Indices’):

Rationale for methodology change

Solactive has determined that the current determination of the Free Float Market Capitalization of the securities in the Affected Indices on a Selection Day and any security in the Index Universe does not sufficiently take into account the particularities of companies that are incorporated in a country outside of Australia. Currently, the Free Float Market Capitalization of foreign companies is adjusted by a factor to reflect the number of shares held in Australia, as published by the Australian Securities Exchange (ASX).  For foreign companies the number of shares outstanding in free float is not taken into account, how this is reflected for companies incorporated in Australia.  In order to ensure a consistent approach for all securities in the Affected Indices and to improve the representativeness and replicability of the Affected Indices, the free float of foreign companies will now also be adequately taken into account.

The changes to the index guideline specified below will be applied to the upcoming adjustment that is scheduled for the close of 18 December 2020.

Changes to the Index Guideline

The following Methodology will be reflected in the index guideline of the Affected Indices by adding a new line item to the Definition “Free Float Market Capitalization” in Section 4 “Definitions”:

“The “Free Float Market Capitalization” is with regard to each of the securities in the Index on a Selection Day the share class-specific Free Float Market Capitalization for any security in the Index Universe. It is calculated as the multiplication of the shares outstanding in Free Float (as sourced from data vendors) with the Trading Price of the share class as of the respective Selection Day.

All securities that are part of the Index Universe and have Foreign Entity Data available, receive a separate Free Float Market Capitalization adjustment based on the following:

1. a) Foreign Entity Data is updated annually during the September Adjustment Date based on data as published by the ASX.
2. b) For each foreign company an adjustment factor is calculated in order to reflect the securities held in Australia.
3. c) At each quarterly Selection Day, the Market Capitalization of these companies is multiplied with the above adjustment factor to determine their Free Float Market Capitalization.

[new addition:

1. d) If the adjusted Free Float Market Capitalization for foreign companies as determined in accordance with points a) to c) above is larger than the Free Float Market Capitalization for the respective foreign company (as sourced from data vendors), the lower of the two values is used in the selection process.]

Foreign Entity Data is the data provided by the Australia Securities Exchange for companies that are incorporated in a country outside of Australia and listed on ASX. Data includes the number of securities quoted on ASX as well as securities held in Australia.”

Defined terms used in this announcement, but not defined herein, have the meaning assigned to them in the respective index guideline of the Affected Indices. The amended version of the index guideline will be available on the effective date.