Investors need an objective framework for understanding market inclusion, so twice a year we announce the results of our Country Classification Reviews for fixed income and equity markets. Our country classification approach follows a comprehensive and transparent process, informed by feedback from a broad set of independent market participants and index users. the framework per se doesn’t provide an objective framework for investment and evaluation, it governs market inclusion
- We confirm that Iceland will be assigned Secondary Emerging market status and included in the FTSE Global Equity Index Series (GEIS), effective from the September 2022 semi-annual review.
- We also announced that Vietnam and Mongolia will remain on the Equity Country Classification Watch List. Vietnam was added to the Watch List in September 2018 for possible reclassification from Frontier to Secondary Emerging market status and Mongolia was added to the Watch List in September 2021 for possible reclassification from Unclassified to Frontier market status.
- Our ongoing and constructive engagement with Indian market authorities continues, following the initiative to transition to a T+1 settlement cycle for the Indian equity market. We will continue to work with Indian financial and market institutions to encourage a solution that meets the operational requirements of international investors.
Iceland meets all of the FTSE Quality of Markets criteria and the minimum size and eligible securities count requirements for attaining Secondary Emerging market status within the FTSE Equity Country Classification scheme. We will confirm by 30 June whether we will implement Iceland’s inclusion in the FTSE GEIS in one or more tranches.
- New Zealand government bonds will be included in the FTSE World Government Bond Index (WGBI) after the New Zealand local currency fixed rate government bond market met all three eligibility criteria. Index inclusion of New Zealand bonds will take place in November 2022 and is projected to comprise 0.19% of the WGBI on a market value weighted basis.
- Switzerland retains its place on the Fixed Income Country Classification Watch List for a potential upgrade to Market Accessibility Level “2” and inclusion in the WGBI. India’s place on the Watch List for a potential upgrade to Market Accessibility Level “1” and consideration for inclusion in the FTSE Emerging Markets Government Bond Index (EMGBI) will also remain unchanged.
Iceland’s promotion to Secondary Emerging equity market status, and New Zealand’s inclusion in the WGBI reflect a strong consensus among index users that both meet the criteria in the FTSE equity and fixed income country classification frameworks. FTSE Russell’s reclassification of both markets followed a comprehensive and transparent process that affords markets and investors with a clear understanding of the necessary steps for a market’s reclassification and index entry. The result is a positive, transparent outcome for market participants.
Finally, we also affirmed our off-cycle reclassification of Russia to “Unclassified” market status for equities and “Unassigned” market status for fixed income following the imposition of capital controls and associated restrictions on non-resident investors.
The FTSE Fixed Income Country Classification Announcement can be found here.
The FTSE Equity Country Classification Announcement can be found here.
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