Skip to main content

You are here

Blog Listing Page

Greece: What effect will the crisis have on FTSE indexes?

As Greece moves towards a referendum on its debt repayment terms on July 5, the country’s future seems more uncertain than ever. The imposition of capital controls in Greece, the closure of the Athens Stock Exchange and the capping of Emergency Liquidity Assistance by the ECB (resulting in the temporary closure of its banks) are already causing financial and economic dislocation. In these circumstances, all index providers are considering how best to treat Greece in their global indexes.

In keeping with its transparent and consultative model of index governance, FTSE has instituted a consultation with clients and other stakeholders to assess the impact of the capital controls and the closure of the stock exchange. This assessment will, of course, also take into account the likely duration of these events in the light of the outcome of the referendum.  On the basis of this consultation, FTSE will determine whether Greek securities should remain in its global indexes (including GEIS) or if conditions warrant their removal and if so, at what price. If it is determined that Greek securities should be removed from the global indexes, FTSE will create individual Greek indexes for those clients that require them.

It is worth noting that the imposition of capital controls does not automatically mean that FTSE will demote Greece from its Developed country classification status. That is a longer term decision. Greece’sstatus will be reviewed as part of the annual country classification process in September. If Greece were to be removed from FTSE Russell indices prior to the September country classification meeting as a result of capital controls, then it would have to go through the classification process as a new market before it would be reconsidered for index eligibility.

As always, FTSE will keep its clients and the markets fully informed of its deliberative process and decisions in good time.

 

 

© 2015 London Stock Exchange Group companies.

London Stock Exchange Group companies includes FTSE International Limited (“FTSE”), Frank Russell Company (“Russell”), MTS Next Limited (“MTS”), and FTSE TMX Global Debt Capital Markets Inc (“FTSE TMX”). All rights reserved.

“FTSE®”, “Russell®”, “MTS®”, “FTSE TMX®” and “FTSE Russell” and other service marks and trademarks related to the FTSE or Russell indexes are trademarks of the London Stock Exchange Group companies and are used by FTSE, MTS, FTSE TMX and Russell under license.

All information is provided for information purposes only. Every effort is made to ensure that all information given in this publication is accurate, but no responsibility or liability can be accepted by the London Stock Exchange Group companies nor its licensors for any errors or for any loss from use of this publication.

Neither the London Stock Exchange Group companies nor any of their licensors make any claim, prediction, warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the FTSE Russell Indexes or the fitness or suitability of the FTSE Russell Indexes for any particular purpose to which they might be put.

The London Stock Exchange Group companies do not provide investment advice and nothing in this communication should be taken as constituting financial or investment advice. The London Stock Exchange Group companies make no representation regarding the advisability of investing in any asset. A decision to invest in any such asset should not be made in reliance on any information herein. Indexes cannot be invested in directly. Inclusion of an asset in an index is not a recommendation to buy, sell or hold that asset. The general information contained in this publication should not be acted upon without obtaining specific legal, tax, and investment advice from a licensed professional.

No part of this information may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission of the London Stock Exchange Group companies. Distribution of the London Stock Exchange Group companies’ index values and the use of their indexes to create financial products require a license with FTSE, FTSE TMX, MTS and/or Russell and/or its licensors.

Past performance is no guarantee of future results. Charts and graphs are provided for illustrative purposes only. Index returns shown may not represent the results of the actual trading of investable assets. Certain returns shown may reflect back-tested performance. All performance presented prior to the index inception date is back-tested performance. Back-tested performance is not actual performance, but is hypothetical. The back-test calculations are based on the same methodology that was in effect when the index was officially launched. However, back-tested data may reflect the application of the index methodology with the benefit of hindsight, and the historic calculations of an index may change from month to month based on revisions to the underlying economic data used in the calculation of the index.

 

Blog Listing Page