Nasdaq OMX has changed the "seasoning rules" for three of its
most popular indexes, including the flagship Nasdaq 100 Index, in a
move that may hasten the entry of the social media giant Facebook
into the $35 billion PowerShares QQQ Trust (NasdaqGM:QQQ) following
the company's planned IPO in May.
The new rules, effective April 23, 2012, shorten the period of
time companies must be trading on the Nasdaq or the New York Stock
Exchange before they are eligible for inclusion in the Nasdaq 100
Index (NDX) to three months. Previously, companies had to wait one
year (for companies that ranked in the top 25 percent of the index
by market capitalization) or two years (for all other firms) before
they were eligible for the index.
When will Facebook, which will IPO in May at a value of
approximately $100 billion, enter the new index and what will its
weighting be? That is uncertain because Facebook has not yet gone
public and Nasdaq bases its weightings on the market value of the
security that is issued, not the value of the company. Further,
some companies issue more than one security.
Traditionally, Nasdaq rebalances its Nasdaq 100 index each
December, based upon the price of a security as of the end of
October and the total shares outstanding as of the end of
November. Assuming Facebook succeeds in pricing its IPO before the
end of July, it would have enough seasoning time to qualify under
the new 'three month' seasoning window.
Other Rule Changes
In addition to new seasoning rules for certain indexes, Nasdaq
also is applying changes to its special dividend policy, effective
May 1, 2012, across all indexes calculated in the U.S. (including
Nasdaq, Nasdaq OMX and PHLX-branded indexes).
Currently, in the case of a special cash dividend, a
determination is made on an individual basis whether to make an
adjustment to the last sale price of an index security on the
ex-date of the dividend. Following the methodology change, a
special cash dividend announced by the listing exchange for an
index security will result in an adjustment to the last sale price
of the security prior to market-open for the special dividend
Nasdaq is also changing the annual evaluation of its family of
Nasdaq OMX Green Economy Indexes, to be effective after the close
of trading on the third Friday in June (June 15, 2012), in
conjunction with the quarterly rebalance. The quarterly rebalance
will continue to use eligibility criteria through the end of May,
with all changes becoming effective after the close of trading on
Friday, June 15, 2012.
Permalink | 'copy; Copyright 2009 IndexUniverse LLC. All rights
Don't forget to check IndexUniverse.com's ETF Data
2012 IndexUniverse LLC
. All Rights Reserved.