Rule for the TEDFIX 30 Tehran Stock Exchange

Rule for the TEDFIX 30

Tehran Stock Exchange

1. Composition of TEDFIX 30

1.1 definition The TEDFIX 30 is a total return index weighted by free-float market capitalization that measures the performance of 30 equities listed on Tehran Stock Exchange (TSE).

1.2 Purpose The TEDFIX 30 is designed to reflect the general trends in the trading of shares listed on Tehran Stock Exchange. It is made up of shares issued by 30 companies selected among the 100 largest and most traded stocks on TSE in such a way that it is not only a suitable measure for designing index instruments including derivatives and funds products, but also a relevant benchmark for portfolio management.

1.3 Universe Constituents are selected from the stocks listed in Tehran Stock Exchange.

1.4 Eligibility Index components are selected according to the market capitalization and rule liquidity criteria. Thus, 100 large cap companies are listed on descending basis and 30 companies meeting the following requirements are selected from among:

1. It is at least 3 months since they have been listed and traded in TSE. 2. Their monthly value traded in the last 6 months ended the review date exceeds 25% of average monthly value traded of 100 large companies in this period. (for companies being listed for less than 6 months, the period will be 3/4 of the period when the share has been listed). 3. Free floats share is at least 10%.

1.5 Maximum The weight of a company in TEDFIX 30 is capped at 15% of the free float weighting of market capitalization. percentage

1.6 Shares The shares number of a company in TEDFIX is the last shares registered with TSE, which will be reviewed quarterly.

2. Calculation and Publication of TEDFIX 30

2.1 Calculation TEDFIX 30 is calculated as an index weighted by free-float market capitalization through adjusted market value divided by base level:

[∑ × xi×Nosi×cpi×f i] = ×= b×adj1

Where: base level =1000 n= the number of shares in the index (30) Xi= Closing price of share i considered as VWAP Nosi= number of shares issued cpi= Capping factor of share i ffi= free float of share i b= index base adj1= adjustment coefficient of index level

2.2 Index base The base date for TEDFIX 30 base is 23/8/2010 and the base level is 1000.

2.3 Publication The level of the TEDFIX 30 is calculated and published every 800 seconds. frequency

2.4 Start The calculation of the level of TEDFIX 30 starts when TSE begins trading calculation session in listed shares in accordance with the provisions of Trading Rules.

2.5 Share prices The volume weighted average of share prices (VWAP) is used as price base (closing price) in the index.

3. Opening

3.1 Opening The opening level is calculated using the opening prices of traded level/ constituents or in the case of constituents that have non-traded, halted or Opening suspended status, the previous day closing prices. The opening index level criteria reflects the opening prices of the index constituents. After the market opens the last TEDFIX 30 level based on the determined frequency, will be calculated on the basis of the most recent traded prices, or the most recent reference price (possibly adjusted to account for corporate actions).

3.2 Closing level The following indices are disseminated after the market close.

· The reference closing level, which is calculated on the basis of the closing share price (Volume Weighted Average Price). · The reference opening price, which is calculated on the basis of the

opening share price.

In both cases, for constituents that have non-traded or halted status, the previous day closing prices are used, instead.

3.3 TEFIX level TEFIX 30, price index of 30 large companies is calculated and published as concurrently with TEDFIX 30 (price and dividend index) of 30 large companies.

4. Rules for the Periodical Review of TEDFIX 30

4.1 Responsibility The review of the composition of TEDFIX 30 is the responsibility of Tehran for review Stock Exchange.

4.2 General aim The general aim of TSE when making periodical review of the TEDFIX 30 is of review to ensure that the principle set out in 4.1 is met. Data related to a new constituent, including free float percent and number of shares issued, is announced by an official notice for market participants. The review will be effective after one week.

4.3 Frequency of Share composition is reviewed on the third Wednesday of the last month of review every quarter and based on the free float market capitalization and the trade value of 6 months ended the review date. The number of shares issued by a company is the number of its listed shares. The new issued shares are accounted for in the calculations, where they are confirmed officially by TSE at least two days in advance of the review date.

4.4 Price used in The closing price calculated on review date. review

4.5 Free float Free floats used in calculation of TEDFIX 30 are reviewed quarterly. shares

4.6 Capping A weighting limit of 15% is applied to TEDFIX 30 constituents on the basis factor of capping factor. If the weight of a given stock exceeds this limit it is scaled down by capping factor.

5. Corporate Actions Affecting the Composition and Weighting of Constituents

5.1 General The Committee of TEDFIX 30 may, in addition to quarter review, decide to change the composition of the index due to events which affects one or more of its constituents.

5.2 Bonus The number of shares is increased by the number of bonus shares created, and shares the share price is reduced by the theoretical value of the right. Although the combination of these changes leaves the total index market capitalization unchanged and the index level is not adjusted, the adjusted price is calculated as follows:

=( × )/( + )

Where: Y= number of bonus shares X= the last number of shares If the bonus shares are not added in the same day, the base level should be adjusted as the market capitalization reduces.

5.3 pre-emptive Adjusted price and the base level are adjusted as follows at opening time: right = (( × ) + ( × ))/( + )

Where: Y= number of bonus shares X= the last number of shares Z= pre-emptive right

= ×( +1000× ℎ )/

5.4 Bonus & The adjusted price and base level at opening time are adjusted as follows: pre-emptive right =(( × × ) + ( × × ))/(( × ) + ( × ) +( × )

Where:

A= current capital B= bonus X= current capital Y= bonus Z= pre-emptive right

= ×( +1000× ℎ )/

5.5 Free float Where the change in free float is equal to or greater than 5%, the base level will factor change be adjusted.

New base= old base ×( free float adjusted market value on the adjustment date± adjustment amount)/ free float adjusted market value on the adjustment date

5.6 Capping The Committee may decide to review exceptionally the capping factor in factor change response to a substantial change in the shareholding structure of the companies concerned, or if extraordinary corporate events significantly change the

weighting in the index.

5.6 Dividend No adjustment takes place on the day when a share becomes ex- dividend and theoretical price will be opening price of next session.

6. Definitions

Free float is the portion of a company's shares that is not belonging to strategic shareholders and it will be sold in the best offer. In calculation of free float, the number of shares owned by strategic shareholders is deducted from the total shares. The following shareholders holding at least 5% shares are considered as strategic shareholders: · Institutional shareholders and their affiliates. · Labor share holders. · Governmental shareholders and public institutions.