BSE sets new norms for differential voting rights shares

Premier stock exchange BSE today announced new norms for considering differential voting rights shares (DVRs) in the indices, including Sensex and BSE 100.
Differential Voting Right Shares (DVRs) are similar to common equity (ordinary) shares listed and traded on the stock exchange, except in respect of dividend and voting rights.
Companies generally compensate DVR investors with higher dividends.
According to BSE, DVR share class is eligible for inclusion in the BSE Sensex, S&P BSE 100, S&P BSE 200 and S&P BSE 500 indices if ordinary share class is part of the new index portfolio.
Further, DVR shares should have a minimum of 10 per cent shares outstanding of the company.

"DVRs will be analyzed independently for inclusion provided it meets inclusion criteria for the respective index," BSE said in a statement.

The move will increase number of stocks in a fixed count index; however the number of companies will remain same.
Regarding exclusion, BSE said that if the ordinary share class is dropped from the index, the DVRs will also be removed from the index.
The move will be "effective with the upcoming rebalance in June, 2015.