SIX Swiss Exchange has launched the SPI 20 to mirror the current SMI and keep the same non-capped strategy after the SMI has been altered.
The regulations and methodology of the SMI Index Family have been changed by the executive board at SIX Swiss Exchange, effective from 18 September 2017.
The weighting of the largest shares in the SMI will be capped at 18%.
An exact replica of the current SMI, the new SPI 20, which was launched on 4 July, comprises the 20 largest equities in the SPI, representing about 85% of the total capitalisation of the Swiss equity market.
As it currently stands, this amendment will affect the weightings of Novartis and Nestlé, to which the index has a position of 19.45% and 22.72% respectively.
The largest shares will be capped at the quarterly index reviews. As soon as the weightings of two shares in the index exceed 20%, they will be reduced to 18% between the reviews.
There will be a gradual reduction in the weightings of the largest components, reducing them by 3% each quarter until reaching a maximum of 18% of the SMI.
The new changes will bring the SMI into line with international regulations set by ESMA- Ucits Directive.
In the meantime, the SMI and the SPI 20 will run alongside one another with the same composition.