Nasdaq Canada Index

The S&P/TSX Composite Index is an index of the largest companies on the Toronto Stock Exchange as measured by market capitalization. The companies included in this index comprise more than 70% of the market capitalization of all Canadian-based companies that are listed on the TSX (Toronto Stock Exchange).

There are several S&P/TSX Canadian indices that provide investable indices for the Canadian equity markets. The S&P/TSX Composite Index is the broadest measure. The TSX Composite Index serves as the basis for numerous sub-indices that represent various aspects of the market in Canada. They make use of such means as the Global Industry Classification Standard, size and income trust inclusion versus non-inclusion, etc.

The S&P/TSX Composite Index is maintained, calculated and managed by Standard & Poors. It is the principal broad market measure of the Canadian equity market. This index includes income trust units and common stock. The stocks that are included in the TSX Composite Index are also included in the S&P/TSX Equity indices (the S&P/TSX Equity 60, the S&P/TSX Equity, and the S&P/TSX Equity Completion) or income trusts indices (the S&P/TSX Capped REIT, the S&P/TSX Income Trust, and the S&P/TSX Capped Energy Trust), or both.

A public company must meet certain eligibility criteria in order to be included into the TSX Composite Index. Market Capitalization is one of the main eligibility criteria. (A security must represent a minimum weight of 0.05% of the index. Furthermore, the security (the company stock) must have a minimum weighted average price during the last three months, and the last three trading days of the month-end prior to the exchange reviewing the index, of at least $1 CDN.

Liquidity is the second index eligibility criterion. The dollar value of the trading volume and the number of transactions must exceed at least 0.025% of the sum of the trading volumes of all eligible securities. To ensure that no single company dominates the trading, the trading of any eligible security is capped at a maximum of 15% of the value, volume and transactions of all trading.

The last eligibility requirement is that the company must be incorporated under Canadian laws and its stock must be listed on the Toronto Stock Exchange.

As a rule, additions and deletions of companies from the index are made during the quarterly review.

The TSX Composite index is designed to represent the Canadian equity market and its sectors and liquidity, and to support investment products, such as indexes mutual funds, exchange-traded funds, index portfolios, and index futures and options.

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