FTSE Country Classification
FTSE recognises the importance of the application of a transparent, objective and consistent approach when assigning the market status of countries as Developed, Emerging, Secondary Emerging or Frontier.
In 2003, FTSE conducted a widespread market consultation which resulted in the development of a framework and criteria for assigning countries based on:
- Economic size
- Wealth
- Quality of markets
- Depth and breadth of markets
FTSE applies this framework to conduct an annual review of the market status of all countries into Developed, Advanced Emerging, Secondary Emerging or Frontier. Any changes to a market’s status will be subject to at least six months' notice.
In order to ensure that the potential reclassification of countries is transparent to investors we have created a Watch List containing countries that may be subject to a change in their classification if applicable Quality of Markets (QoM) criteria are met. The Watch List is reviewed annually by the FTSE Policy Group each September. A full list of countries and their current classification against FTSE's QoM criteria can be viewed in the September 2008 Country Classification Update.
September 2008 Country Classification Review
At the September 2008 Country Classification Review, the FTSE Policy Group approved the following changes to the designation of countries in the FTSE Global Equity Index Series:
- South Korea will be promoted to Developed status;
- China Red Chips will be reclassified as China (Secondary Emerging) from Hong Kong (Developed).
Implementation of these changes will take place as follows:
- South Korea will be will be added to all FTSE Developed custom and standard indices from September 2009;
- China Red Chip Shares will be added to all FTSE Secondary Emerging custom and standard indices from September 2009.
For a current update on FTSE's Country Classification programme, including the full list of Watch List countries, please download the September 2008 Country Classification Update.
A research report detailing the impact of these changes is available. Please register your details here to access the report.
