Bolsas y Mercados Españoles


The IBEX 35® is the index made up by the 35 most liquid securities traded on the Spanish Market, used as a domestic and international benchmark and as the underlying index in the trading of derivatives. Technically it is a price index that is weighted by capitalization and adjusted according to the free float of each company comprised in the index.

1. May a security be chosen to be included on the IBEX 35® by taking into account the sectors already represented on the index?

Among the criteria considered for the inclusion of a security on the IBEX 35®, in no event is the economic sector it belongs to taken into account, because the IBEX 35® is not subject to any specific sector diversification. The IBEX 35® is the underlying index for derivatives trading and it comprises the 35 most liquid companies traded on the Spanish stock exchange regardless of the sector they belong to.

2. Are the shares making up the IBEX 35® those of the 35 largest companies?

Not necessarily. The selection of a security to be included on the IBEX 35® does not necessarily depend on the size of the companies, although a minimum market capitalization is required to be eligible for the IBEX 35®. Many large companies that are regularly traded on the stock exchange, with large daily trading volumes, belong to the IBEX 35®, though not because of their size but owing to their liquidity.

3. According to the Technical Regulations for the Composition and Calculation of the Sociedad de Bolsas, S.A. indices, the IBEX 35® is made up by the 35 most liquid securities during the control period. How is the liquidity of securities measured for the purpose of choosing them?

According to the Technical Regulations for the Composition and Calculation of the Sociedad de Bolsas, S.A. indices¹, the Technical Advisory Committee² (hereinafter "the Committee") considers, for each security, the effective volume traded on the order-driven market or main trading market, provided that such effective volume fulfills certain quality guarantees regarding the trades. In this respect the Committee shall supervise and may deduct trades with the following characteristics, as the case may be, from the total effective volume traded during the control period:

  • Those resulting from transactions involving a change in the stable shareholding structure of the Company.
  • Trading volume involving a single market member, over very few trading days or during a period that the Manager of the index deems non-representative.
  • A decline in the trading volume such that the Index Manager considers that the liquidity of the security is seriously affected.
  • The characteristics and amount of the transactions on the market (mainly trading volumes arising from IPOs or placements of shares on the Stock Exchange, until the trading of the same becomes stabilized).

Once the liquidity has been appraised and when securities have similar liquidity measures, the Committee shall take into account additional factors for selection purposes, such as:

  • The statistics for the trading volume and characteristics of the trading, the quality of the buy-sell spreads, turnover and other liquidity measures (volatility, depth of the order book, annualized liquidity index, volume in the order book vis-à-vis market capitalization, average buy-sell spread, weighted average buy-sell spread, Kyle's lambda, etc.).
  • The stability of the index, bearing in mind the use of the index as the underlying index for derivatives trading.

¹ These regulations are set out on the website
² Also known as the "Expert Committee"-it decides at its ordinary meetings, the follow up meetings or extraordinary meetings (when circumstances so require) the securities making up the IBEX 35®. This Committee is made up by renowned experts from the academic and financial fields.

4. What are the minimum requirements that must be met by a security for it to become a candidate for the IBEX 35®? Is it necessary that the security be traded during the entire control period prior to the Committee meeting for it to be chosen?

The control period is the full six-month period before each ordinary meeting, and follow up meeting of the Committee¹. For a stock to be a candidate for inclusion on the IBEX 35® it must pass certain minimum tests. The first one establishes that, in order for a stock to be eligible, the average capitalization of the said security on the index must be over 0.30% of the average total index capitalization during the control period (this entails the exclusion of small caps). Once this test is passed, the second test establishes that the security is to have been traded in at least one third of the trading days during the control period. If it does not pass this test, the security could still be chosen if it were one of the top 20 securities by market capitalization. According to the foregoing, it is not necessary for a security to have been traded during the full control period, provided that the said security passes the tests set out above.

¹ For the ordinary meeting held in June (for the purpose of the review effective on the following trading day after the third Friday of the month), the control period comprises the December-May interval prior to the meeting. For the ordinary meeting held in December (for the purpose of the review effective on the following trading day after the third Friday of the month), the control period comprises the June-November interval prior to the meeting. Annually there are also two follow up meetings held on March and September, and the control periods are: September-February and March-August respectively.

5. Is a security whose price rises dramatically over a long period an ideal candidate to be included on the IBEX 35®?

The evolution of the price of a security is not one of the factors taken into account by the Committee in its decision-making process-this is based exclusively on liquidity criteria. Even though statistically there is often some relation between price hikes in a security and increases in terms of liquidity, a security has to become one of the 35 most liquid securities(according to the reply to question 3 above)for it to be included on the IBEX 35®.

6. Are long-term forecasts made in any way regarding the circumstances surrounding a security for its inclusion on or exclusion from the IBEX 35®?

In its decision-making process, the Committee does not make long-term forecasts when including a security on the index or excluding it from the same, although it may consider transactions scheduled for the near future, regarding which the reliable disclosed information may or may not be sufficient-for instance, the specific dates may not be known. In any event, it shall be publicly disclosed, reliable information that significantly affects the criteria used by the Committee, which are set out on the Technical Regulations for the Composition and Calculation of the Sociedad de Bolsas, S.A. Indices. In no case does the Committee consider forecasts on trading volume (for instance, owing to the rise or fall of an industry sector or a given geographic area that the company is related to), the arrival of competitors (whether domestic or foreign) particularly affecting a given security, etc.

7. What information does the Committee use to make its decisions?

The various documents that are published by Sociedad de Bolsas, S.A. (report on liquidity, free float, betas and correlations, etc.) are the basic materials used by the members of the Committee when they make their decisions. There are also other internal reports furthering the information specified under the reply to question 3 above.

8. What number of shares is considered when deciding to include a security on the IBEX 35®?

The number of shares counted for a security included on the index is based, in accordance with the regulations, on the security's free float. The free float is the number of shares outstanding on the market that do not belong to a direct shareholding (block ownership capital that is therefore not outstanding on the market). According to the data in the CNMV Register prior to the Committee meeting, block ownership capital shall be deemed to be:

  • Direct shareholdings greater than or equal to 3% of the share capital, and
  • Direct shareholdings held by the members of the Board of Directors regardless of their amount.

The Committee shall take the preceding data¹ into account and it shall consider the relevant facts that have been officially notified to the CNMV before the end of the control period of every ordinary, follow up or extraordinary review, which affect the calculation of the free float on dates close to the application of the Committee's decisions. Finally, the Committee may appraise any other circumstances in the composition of the shareholding registered at the CNMV which has any influence over the efficient replication of the IBEX 35®, also taking into account, as the case may be, the indirect shareholdings declared.
After calculating the free float of the chosen security, in order to arrive at the number of shares counted on the index, depending on the free float, a coefficient is applied to the total shares of the company, as set out on the table below:

Coefficient to Be Applied Depending on the Free Float ( of the Regulations)

Free FloatApplicable Coefficient
Less than or equal to 10% 10%
More than 10% and less than or equal to 20% 20%
More than 20% and less than or equal to 30% 40%
More than 30% and less than or equal to 40% 60%
More than 40% and less than or equal to 50% 80%
More than 50% 100%

For instance, for securities with a free float between 40% and 50%, the coefficient to be applied to the total number of shares of the company for the purpose of its weighting on the IBEX 35® will be 80%².

¹ Even if the holder appearing on the Register is a nominee, unless it communicates to the CNMV in the appropriate manner that such shareholdings taken individually are below 3%.
² The major objective of the free float brackets is to simplify the replication of the index, in such a way as to avoid continuous minor readjustments. Changes in the number of shares (free float) for the purpose of calculating the index take place, other than under exceptional circumstances, as from the date when the decisions made by the Committee at its ordinary or follow up meetings enter into force.

9. Throughout the life of a company there may be relevant facts affecting its present and future: capital increases, mergers, segregations, takeovers, etc. If the IBEX 35® is reviewed four times a year, are these facts taken into account?

Yes. Although the IBEX 35® is reviewed quarterly for the purpose of the securities making up the index and the number of shares taken of each security for calculation the value of the index, whenever financial transactions take place affecting the securities included on the index, the necessary adjustments are made. The index is generally adjusted in the event of capital increases with preferential subscription rights, extraordinary dividend payouts, share integrations as a result of capital increases without preferential subscription rights¹, reductions of capital by cancellation of shares, reductions of capital charged to equity accounts, with a distribution of the amount of the reduction to the shareholders (but not similar to an ordinary dividend), mergers, takeovers, and segregations of equity.

¹ If the share integration represents a percentage below 1% of the number of shares taken to calculate the value of the index, the adjustment shall be made every six months, coinciding with the re-composition of the index.

10. How many securities are included or excluded in each review? In the half-yearly selection of the 35 most liquid securities, no minimum or maximum number of changes is established in relation to the preceding period. There may be no changes at all or as many changes as deemed appropriate, according to the outcome of the liquidity measurements. Throughout the history of the IBEX 35®, up to five securities have gone out (and another five in) at one time, and in other occasions there were no changes at all in the composition of the index.



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