What is the FTSE 100 Dividend Index?
FTSE 100 Dividend Indices measure the cumulative value of ordinary cash dividends declared by the index constituents of the FTSE 100 Index, calculated on the ex-dividend (XD) date and expressed in terms of index points. FTSE 100 Dividend Indices run for a period of one year from the trading day following the third Friday in December to the third Friday of the following December. ICE Futures Europe offers FTSE 100 Dividend Index - RDSA Withholding Futures (XZ) and FTSE 100 Declared Dividend Index Futures (YZ).
Why are there two contracts?
In 2009, the futures contract on the FTSE 100 Dividend Index— RDSA Withholding (XZ) was launched. All dividends of the FTSE 100 Index constituents, with the exception of Royal Dutch Shell ‘A’ Shares (“RDSA”), are incorporated into the index at 100% of their declared value. For RDSA, dividends are incorporated into the index at 85% of their declared value. This reflects the application of a 15% withholding tax to RDSA dividends, since they represent a source of dividend income from the Netherlands.
Following changes to tax treaties between the UK and Netherlands, FTSE calculated a new FTSE 100 Declared Dividend Index which incorporates dividends of all FTSE 100 Index constituents, including RDSA, at 100% of their declared value.
In 2011, following a market consultation, the FTSE 100 Declared Dividend Index Futures contract (YZ) was introduced.
Will both contracts remain?
Yes, both contracts will remain.
Key Contract Differences
|FTSE 100 Dividend Index - RDSA Withholding Futures (XZ)||Reflects Royal Dutch Shell shares (RDSA) at 85% of their declared dividend value|
|FTSE 100 Declared Dividend Index Futures (YZ)||Reflects Royal Dutch Shell shares (RDSA) at 100% of their declared dividend value|
Are both contracts CFTC approved?
Yes, U.S. regulatory approval has been granted and both contracts are available for offer and sale to U.S. persons and for trading directly from the United States, under the terms of ICE’s existing Foreign Trading System No-Action Letter.
About the FTSE 100 Dividend Index
The FTSE 100 Dividend Index has been designed for ICE by FTSE International. The Index is based on the FTSE 100 Index which comprises stocks that are freefloat weighted to ensure that only the investable opportunity set is included within the index.
The Index is calculated in accordance with the Industry Classification Benchmark (ICB), a global standard developed in partnership with Dow Jones Indexes.
The Index is managed according to a transparent and public set of index rules, and overseen by an independent committee of leading market professionals. The committee ensures that the rules are correctly applied and adhered to. Regular index reviews are conducted to ensure that a continuous and accurate representation of the market is maintained.