Tokyo Stock Exchange TOPIX Index to Cut Constituents by About 40%

The Tokyo Stock Exchange’s TOPIX index will begin changing at the end of October, cutting its constituent companies by about 40% to 986 under revised inclusion rules.

The revised framework will determine inclusion using indicators including stock-trading activity and free-float market capitalization, which measures the value of shares available for public trading.

Under the previous framework, most companies listed on the former First Section of the Tokyo Stock Exchange, now known as the Prime Market, were included in TOPIX.

The company’s listing market will no longer be the main criterion for inclusion. The changes were disclosed Oct. 7, with the adjustment scheduled to begin at the end of October.