Deletion

The deletions of index constituents are categorized into two types: the index with a constant number of constituents and the index with a non-constant number of constituents.

• Index with a constant number of constituents: a deletion correlates to an addition. A constituent must be added when a constituent is deleted to keep the number of constituents constant. The added constituent must be decided within 24 hours of the proposal. If it fails to make the decision within 24 hours, a constituent that satisfies the index criteria is automatically selected according to the CICS classification, if applicable.

• Index with a non-constant number of constituents: a deletion does not correlate to an addition.

General Rules

When a constituent is removed from the top exchanges, it will be deleted from all the indices containing it. The deletion must be executed within 24 hours after it is removed from the exchanges. After the deletion, a rebalancing must be conducted to keep the index level constant.

Other Rules

• When the price of the constituent drops significantly, the circulating market capitalization of the constituent is lower than the requirement of the circulating market capitalization for the eligibility criteria, causing the constituent to go into the buffering stage that lasts for 96 hours. If the price of the constituent further drops to a level that is lower than 50% of the requirement of the circulating market capitalization for the eligibility criteria, it is deleted from the index immediately.

• When a significant change in circumstance or an emergency happens, the proposal for deletion can be made by the Index Committee. The deletion must be completed within 24 hours.

Freezing Stage

The company, project, or organization of the constituent can submit an appeal within 7 days of the deletion. The decision about the appeal is made by the Index Committee and CB DAO. If the appeal is agreed upon by the CBI Index Committee, it goes to the CB DAO for the final decision.

If no appeal is submitted in the freezing stage, or the appeal is rejected, the deletion is executed immediately.

Appeal

If the appeal is rejected, the deletion and corresponding constraints are executed immediately.

If the appeal is agreed upon, the constituent will be re-evaluated as a regular constituent.

Constraint

The deleted constituent with or without a rejected appeal can not be included in any CBI indices within 6 months of the deletion.