FRANKFURT (Reuters) - Germany's blue-chip DAX index will expand to 40 from the current 30 companies with tougher membership criteria, exchange operator Deutsche Boerse (DE:DB1Gn) said on Tuesday.
The overhaul comes in the wake of the Wirecard accounting scandal and marks the biggest shake-up in the index's history.
Since its founding in 1988, the DAX has been Germany's answer to the Dow Jones Industrial Average in New York and the FTSE in London, with 30 members forming the corporate elite in one of the world’s'largest economies.
Most of the index's founding members have since dropped out.
The most recent departure was payments company Wirecard, which in a blow to Germany's capital markets, filed for insolvency just two years after its promotion to the index. The payments company owed creditors billions in what auditor EY described as a sophisticated global fraud.
The expansion diversifies the index. The proposal to expand was pushed by Deutsche Boerse Chief Executive Theodor Weimer and had faced opposition by some investors.
The expansion will take place during the third quarter of 2021, Deutsche Boerse said.