CONSULTATION ON
MSCI HONG KONG-LISTEDSOUTHBOUND INDEX

November, 2017

© 2017 MSCI Inc. All rights reserved.
Please refer to the disclaimer at the end of this document.

BACKGROUND• The MSCI Hong Kong-Listed Southbound Indexes are designed to represent the performance of Large
Cap and Mid Cap securities that are determined by the MSCI Hong Kong Indexes, Hong Kong-listed
HSBC and the MSCI China Indexes excluding B shares and foreign listings.
• Currently, the indexes do not formally take into consideration of eligibility for Southbound Trading onStock Connect system.
• In order to accurately reflect accessibility of securities trading on Stock Connect, MSCI proposes toexclude securities that are not accessible through the Stock Connect from the MSCI Hong Kong-listed
Southbound Indexes starting from the November 2017 Semi-Annual Index Review (SAIR), effective
December 1, 2017.
• MSCI welcomes feedback from the investment community on the proposal. MSCI will announce theresults of the consultation on or before November 28, 2017.
• Please note that this consultation may or may not result in any changes to the MSCI Indexes ormethodologies. Consultation feedback will remain confidential. MSCI may publicly disclose feedback if
specifically requested by respective market participants. In that case, the relevant feedback would be
published together with the final results of the consultation.

2PROPOSAL
Quarterly Index Review:• MSCI proposes not to include securities that are ineligible for Southbound trading on Stock
Connect starting from the November 2017 SAIR, effective December 1, 2017.

On-going Events Maintenance:• IPOs and other early inclusions (such as, spun-off companies, merger, acquisition) are only
considered at the next Quarterly Index Review.

• Constituents of the MSCI Hong Kong-Listed Southbound Indexes that are no longer
accessible through the Stock Connect programs would be deleted from the index with 2days‘ notice.

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SIMULATED IMPACT
Existing constituents of MSCI Hong Kong-Listed Southbound Index not eligible for the Stock Connect:
Security Name##

LINK REITHKT TRUST AND HKT# # HK ELECTRIC INVESTMENTS##Company Mkt
Cap18,2549,240
8,076

Index Mkt
Cap18,254
4,620
2,423

Weight inCurrent Index
1.01%
0.26%
0.13%

No te: A ll market caps are in USD millio ns. Data as o f the clo se o f No vember 1, 2017

Simulated Impact:
Current Index
Index Market# Sec.
CapMSCI Hong Kong-Listed Southbound Index
MSCI Hong Kong-Listed Southbound IMI

1,808,131
2,000,627

174
571

Pro forma Index
Index Market# Sec.
Cap
1,782,834
1,921,746

171
373# Securities
Add
Del

003198

One Way
Index
Turnover*
1.4%
3.9%

No te: A ll market caps are in USD millio ns. Data as o f the clo se o f No vember 1, 20174

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