MOEX Launches Pair of Small, Mid-Cap Weighted Indices

MOEX has introduced two small and mid cap indices, denominated in both RUB and USD, to help satiate a growing

Moscow Exchange (MOEX) has strengthened its equities offering with the introduction of two new benchmark indices for both small- and mid-cap stocks, according to a MOEX statement.

The two new benchmark indices, the MICEX SMID Index (MCXSM), and the RTS SMID Index (RTSSM), will be denominated in both Russian rubles and US dollars respectively and will help meet a growing demand in equity funds for MOEX traders.

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To ensure the highest level of transparency and valuation, both the MCXSM and RTSSM indices will subject to review on a quarterly basis, in conjunction with several other criteria dictated by MOEX. These include that the constituents are listed on MOEX, and that both indices must undergo proper disclosure under the IFRS, whilst maintaining proper liquidity and capital adequacy requirements.

In addition, each index must be properly weighted, following a rigorous process in compliance with UCITS rules. This stipulates that no singular issuer may possess a weighting in the index greater than a 10% threshold, while the aggregated weighting of issuers with individual weightings of more than 5% cannot exceed 40% of the index.

Ultimately, MOEX has determined that the minimum weighting of any issue is pegged at 0.3%, though no single sector can exceed 20%. The aforementioned calculation methodology is slated to take effect on February 10, 2016.

MOEX recently made headlines after it reported its trading volumes for January 2015, which saw a pullback in its foreign exchange (FX) market turnover, essentially paring last month’s gains. In January 2016, the total FX market turnover at MOEX retreated to RUB 27.7 trillion, falling -10.4% MoM from RUB 30.9 trillion in December 2015 – this included spot trades of RUB 12.0 trillion and swap trades coming in at RUB 15.7 trillion in January 2016, each lower MoM than their December 2015 counterparts.

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