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Nov. 24, 2020, 2:33 a.m. EST

DAX index to expand, but with tougher rules

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By Cecilia Butini

Deutsche Boerse AG said Tuesday that the German benchmark index DAX will be expanded by 10 members to a total of 40 starting in September 2021, and that new rules put in place by index provider STOXX Ltd. are set to regulate membership in the index.

The German stock-exchange operator also said that the MDAX index will be reduced from 60 to 50 members.

According to Deutsche Boerse, starting next month all future DAX candidates will need to have had positive earnings before interest, taxes, depreciation and amortization in their two most recent annual financial statements.

The current requirement that such companies be listed in the Prime Standard of the Frankfurt Stock Exchange will end in March 2021, as companies in the DAX Selection Indices will be mandated to publish audited annual financial reports and quarterly statements, Deutsche Boerse said. Instead, a listing on the Regulated Market will be sufficient, the operator said.

"The comprehensive changes in the index rules were decided to increase the quality of the DAX indices and to align them with international standards," Deutsche Boerse said.

A proposal to exclude companies from the DAX that are "involved in controversial weapons" was rejected, according to the stock-exchange operator.

Write to Cecilia Butini at cecilia.butini@wsj.com

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