The end of Wirecard as a Dax group is fixed: Deutsche Börse is changing its criteria for removing a company from the leading index. The insolvent company is expected to drop out of the index in August.
The exclusion of Wirecard from the German stock index (Dax) is getting a lot closer: On Wednesday evening after the market consultation, Deutsche Börse announced new rules for an immediate expulsion of insolvent companies from the German benchmark index. Deutsche Börse had asked investors and fund managers, among other things, to submit comments on the plans since last month.
The new rules, which come into force on August 19, are a direct reaction by Deutsche Börse to the Wirecard scandal. The Munich-based financial service provider was the first DAX company to file for bankruptcy in June. In spite of this, Wirecard is still listed in the index of the 30 most important German companies, as there was no rule for the immediate exclusion of insolvent groups.
New rules enable Wirecard to be excluded in August
As Deutsche Börse also announced, changes in the composition of the DAX selection indices will be announced on August 19 after 10:00 p.m. and will be implemented two days later after the market closes. The affected indices will be calculated with the new composition from August 24th. This means that the Munich scandal group Wirecard could still be excluded in August.
In the future, the affected Dax companies will also be excluded from the Dax for one year as well as from the S-Dax, the M-Dax and the Tec-Dax. The reform should also apply to these Deutsche Börse indices.
According to the previous specifications, scheduled reviews of the Dax composition only take place every three months. Accordingly, Wirecard could have stayed in the Dax until September 21. This approach had caused a lack of understanding and criticism on the markets.