Succession question still open: Dax throws Wirecard out in August

Falsified accounts, insolvency, 200 million euros less market value: the reasons why Wirecard is thrown out of the Dax are varied. But so far, Deutsche Börse has been obliged to wait until September. Now the rules are being changed.

After the billions in the balance sheet scandal, the insolvent payment processor Wirecard will soon be out of the German leading index Dax. In a survey by Deutsche Börse, a majority of market participants voted for a change in the rules that would lead to the ban of the bankrupt group at the end of June, as Deutsche Börse announced. Wirecard is now leaving the leading index after close of trading on August 21.

Whoever follows the payment provider in the Dax will not be announced by the stock exchange until next week. In all likelihood, the race will be won by the restaurant delivery service Delivery Hero and the flavor manufacturer Symrise. According to the previously applicable index rules, Wirecard would not have been thrown out of the index until September 21 – because of the bankruptcy, but also because of the stock market value that had collapsed to 200 million euros.

The pressure from market participants to react faster, however, increased. The stock exchange therefore proposed a rule change in mid-July, which has now been approved by investors. In the future, companies will be temporarily eliminated from the Dax selection indices (including MDax, SDax and TecDax) after filing for insolvency. Previously, this was only planned for the next regular check, which is due every three months.

The possible successor Delivery Hero had sold its Germany business to competitor Just Eat Takeaway ("Lieferando") – so the former startup can hardly be considered a reflection of the German economy, which the Dax is supposed to represent. A few years ago, however, the stock exchange took away all leeway for the Dax composition from the working group for stock indices. It only makes decisions based on the market value of the free float and the trading volume. Independently of the lightning survey, the exchange is working on a reform of the Dax rules, on which the market participants should then vote again. So far, the index provider has kept a low profile on the content.