The Solactive Rare Earth Performance Index (Solactive Rare Earth) is an index calculated and distributed by Structured Solutions AG. Solactive Rare Earth trackes the performance of companies, which are active in the exploration or extraction of rare earth metals or investing in pure rare earth mines, and is thus an indicator for this market.
The constituents of the Solactive Rare Earth Performance Index weighted on adjustment days according to their market capitalization. The maximum weight of a single index component is 25% on an adjustment date. Individual index weightings may exceed 25% between adjustment days, depending on developments of the stock price. Should the tradable volume not be sufficient on an adjustment day, the committee reserves the right to reduce the weighting of a constituent by 50%.
Selection of index members
The main composition as well as the continuous adjustments are subject to the following rules:
On selection day, the index advisor creates the selection pool of companies. There may be no more than one company in the selection pool that does not satisfy criteria b) of the rules laid out in chapter 4 of this guide, under the definition of “selection pool”. From the selection pool the 15 largest companies by market capitalization are selected. Should the selection pool consist of less than 15 companies, the index shall consist of accordingly less companies.
Ordinary adjustments are calculated every quarter, on the evening of the third Friday of the months of March, June, September and December. If this is not a trading day, the adjustment is the preceding trading day. Before the adjustment date the composition of the Solactive Rare Earth Performance index is reviewed and a decision will be announced. The first adjustment will take place in September 2010. Structured Solutions AG can change index constituents on selection day, and can thus be declared before the member selection is finalized.
Indexes require real-time maintenance of systematic price changes.
The committee will maintain the Solactive Rare Earth Performance Index as necessary with concerns to special payments, adjusted capital increases, options, splits, par value changes and reductions in capital. This procedure ensures that values are quoted correctly Ex-date. The ex-ante approach requires general acceptance of the index calculation formula as well as free access to the used parameter values. Structured Solutions AG supplies the calculation parameters. A delayed calculation of the correction would be problematic, as it would lead to a deviation from the defined values.
After an index constituent announces a corporate action, the index calculator will determine if this action will dilute, concentrate, or have any other effect on the calculated value of the stock.
As necessary, the index calculator will make the appropriate adjustments to the index formula to take account of any dilution, concentration or other effects affecting the stock, and declare a date from when these adjustments take effect. The index calculator can include adjustment consider associated stock exchange on the occasion of the concerned corporate action with options traded on this Exchange connections or Futures contracts on the respective index component makes.
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