Methodology Change | Solactive China Electric Vehicle and Battery Index | Effective Date 22/12/2023

Today, on the 08/12/2023, Solactive announces the following changes to the methodology of the following index/Indices (the ‘Affected Indices’):

Rationale for Methodology Change

The Indices aim to represent companies that are actively engaged in the Chinese electric vehicle and battery related industry, which has grown over time and additional companies have entered this business segment. Companies, partially with low trading volume. To address this circumstance and to avoid tradability constraints due to low trading volume, the following changes will be implemented:

1. Increase of the six months Average Daily Value Traded (ADV) from currently HKD 20 million and on the same time differentiate between Index Components and Non-Index Components. For Index Components the six months ADV will be increased to HKD 60 million, while Non-Index Components will need a six months ADV of HKD 120 million to enter the index.

2. In order to better reflect the market situation in the Chinese electric vehicle and battery related industry based on FREE FLOAT MARKET CAPITALIZATION, Solactive will change the weight constraint for an individual Index Component from currently 10% to 15%.

Changes to the Index Guideline

Section 2.1. INDEX UNIVERSE REQUIREMENTS
From:
“[….]
7. Should have AVERAGE DAILY VALUE TRADED of at least HKD 20 million over 6 months prior to and including the Selection Day
[…]”

To (new version):
“[…]
7. INDEX COMPONENTS should have an AVERAGE DAILY VALUE TRADED of at least HKD 60 million over 6 months and not current Index Components should have an AVERAGE DAILY VALUE TRADED of at least HKD 120 million over 6 months prior to and including the Selection Day.
[…]”

Section 2.3. WEIGHTING OF THE INDEX COMPONENTS
From:
On each SELECTION DAY each INDEX COMPONENT is assigned a weight according to FREE FLOAT MARKET CAPITALIZATION such that the weight of the company does not exceed 10%. The excess weight will be distributed to the other INDEX COMPONENTS pro-rata in an iterative process.

To (new version):
On each SELECTION DAY each INDEX COMPONENT is assigned a weight according to FREE FLOAT MARKET CAPITALIZATION such that the weight of the company does not exceed 15%. The excess weight will be distributed to the other INDEX COMPONENTS pro-rata in an iterative process.

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.