Methodology Change | Cannabis Index (.POTX) | Effective Date 30/10/2020
Today, 28/10/2020, Solactive announces the following changes to the methodology of the following Index (the ‘Affected Index’):
Rationale for methodology change
Due to the development in the Cannabis Market Solactive AG considers to lift the minimum requirement of 25 components. Under the current volatile and consolidating market environment the criteria and steps of relaxation defined in Section 2.1 in the index guideline can no longer assure that the minimum requirement of 25 components will be met. Solactive AG is of the view that further reduction in the current relaxation thresholds is not a sustainable and long-term solution. Therefore, Solactive AG proposes to provide a clear, reliable and predictable provision and to complement the current methodology by stating that in case that less than 25 companies pass the filter and steps of relaxation mentioned in Section 2.1. of the index guideline, all companies that fulfill the criteria until and including the last step of relaxation will be selected as Index Components. The development of the proposed change takes into account that this may lead to a lower number of index constituents and possibly to an increase in concentration on individual Index Components.
Changes to the Index Guideline
The following sentence is inserted at the end of section 2.1:
“In case that less than 25 companies pass the steps of relaxation mentioned above, all companies that fulfill the criteria until and including the last step of relaxation will be selected as Index Components.”
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.