The CAC 40 index composition is reviewed quarterly by an independent Index Steering Committee (French: Conseil Scientifique). If any changes are made, they are effected a minimum of two weeks after the review meeting. At each review date, the companies listed on Euronext Paris are ranked according to free float market capitalization and share turnover over the prior 12 months. From the top 100 companies in this ranking, forty are chosen to enter the CAC 40 such that it is "a relevant benchmark for portfolio management" and "a suitable underlying asset for derivatives products". If a company has more than one class of shares traded on the exchange, only the most actively traded of these will be accepted into the index (generally this will be the ordinary share)
How is CAC 40 selected?
CAC 40 is selected from top 100 of the companies listed on Euronext Paris are benchmarked and selected by Conseil Scientifique. Considering the weighted average of stock prices over a certain period and some indicators, only the most actively traded of these will be accepted into the index.