SSE Free Trade Zone Index Methodology

Appendix 1：

SSE Free Trade Zone Index Methodology

1. Index code and Index name

l  Index Name: SSE Free Trade Zone Index

l  Shortened Name：SSE Free Trade Zone

l  Index Code: 950086

2. Base Period and Base Point

The Base Date of the SSE Free Trade Zone Index is Dec. 31, 2013.The Base Point is 1000.

3. Constituents Selection Method

3.1 Index Universe

The universe includes all A-share stocks listed in SSE except that：

l  The stock has been listed for less than 3 months, or

l  The stock is a ST or *ST stock, or

l  The stock has not been completed the Share-Reform, or

l  The listing has been suspended.

3.2 Constituents Selection

Step 1 Theme screen: Free Trade Zone theme stocks include but not limit to real estate development, building materials, transportation, business and trade, financials, Machinery and equipment companies which are registered in the provinces(cities) where the FTZ is located.

Step 2 Rank all the Free Trade Zone theme stocks in the universe by daily average trading values and daily average total market capitalization of the most recent year respectively in descending order and sum up the two ranks to get the overall rank. select no more than 80 stocks as the constituents.

4. Index Calculation

SSE Free Trade Zone Index is calculated using a Paasche weighted composite price index formula, the formula is:

Adjusted market cap = ∑(Price× Adjusted No. of shares× weight adjusted factor).The calculation of adjusted no. of shares is the same with that of SSE 180. The weight adjusted factor is between 0 and 1. The weight cap of individual constituent is 5%.

5. Index Maintenance

The same with that of SSE 180 Index.

6. Constituents Adjustment

The constituent of SSE Free Trade Zone Index is periodically reviewed twice a year, namely after market close on the second Friday of June and December. Temporary adjustment can be made under certain circumstances if necessary.

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