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FTSE 100 Dividend Index Futures

What is the FTSE 100 Dividend Index?

The FTSE 100 Dividend Index measures 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 offered two futures contracts on the FTSE 100 Dividend Index - RDSA Withholding (XZ) and the FTSE 100 Declared Dividend Index (YZ).

Why were 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.

In January 2022 Shell implemented the simplification of its share structure. As a result of this share simplification, FTSE Russell® announced that the FTSE 100 Dividend Index RDSA Withholding and the FTSE 100 Declared Dividend Index will be identical as there will no longer be any adjustment for the RDSA withholding tax, (more information can be found in the FTSE Russell® Notices issued on 7 January 2022 and 17 November 2021). Since the two indices underlying the Exchange’s two futures contracts were identical there was no longer a need to have two futures contracts admitted to trading. Therefore, effective from 6 May 2022, no new delivery months were made available in the FTSE 100 Declared Dividend Index Futures (PCC: YZ) and all expiries with no open interest (December 2024, December 2025, December 2026, December 2027 and December 2028) were suspended with immediate effect, leaving only the December 2022 and December 2023 contracts available for trading. In addition, effective 23 May 2022, the Exchange changed the contract name of the FTSE 100 Dividend (RDSA Withholding) - Stnd Index Future (XZ) to FTSE 100 Dividend - Stnd Index Future (XZ)

Will both contracts remain?

No, only the FTSE 100 Dividend - Stnd Index Future (XZ) will continue to be available for trading.

Is the contract CFTC approved?

Yes, U.S. regulatory approval has been granted and the contract is 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.

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