Amex Composite Index definition

Stock market index consisted of stocks traded on NYSE Amex equities market

Amex Composite Index definition                                 

What is the Amex Composite Index?

The Amex Composite Index, formerly the American Stock Exchange, was renamed to the NYSE Amex Composite Index after it was bought by the New York Stock Exchange. The index includes all stocks traded on the Amex market – a market for stocks with small and micro capitalisation, derivatives and exchange traded funds (ETFs). The index tracks the performance of companies listed on this market.

It is structured as a market capitalisation-weighted index in terms of companies’ market value. The weight of each stock in the index is associated with its price and the number of outstanding shares. Its NYSE Amex Composition Index ticker symbol is XAX.

Amex Composite Index meaning

The index provides swift insights into the performance of the NYSE Amex equities market. The number of companies listed on the index varies, because new companies can be added or existing businesses can be delisted. New companies are included on the NYSE Amex Composite Index if they satisfy the selection procedures and criteria. 

General selection procedure and criteria:

  • A company should be listed on the NYSE American Exchange.

  • The company stock should be either common stock or an American depository receipt (ADR).

  • The company stock should belong to any of the following types: common stocks or ADR, real estate investment trusts (REIT), master limited partnership (MLP), or closed end investment vehicles.

Aside from the listing requirements, specific procedures and criteria are set in place for delisting or suspending a stock from trading. These criteria are defined in terms of financial performance, decrease in market value, disposal of assets and compliance with agreement terms.

Criteria for delisting or suspending a stock:

  • The stockholder’s equity falls below $2m (£1.6m, €1.8m) as a result of worsening financial performance arising from losses from operations, or net losses in two of the past three years.

  • The stockholder’s equity falls below $4m due to losses from operations, or net losses in three of the past four years.

  • The stockholder’s equity falls below $6m due to losses from operations, or net losses in the previous five years.

  • The company is faced with a significant loss, which is jeopardising its ability to continue its operations in the future.

However, the company will not be excluded as long as:

  • Market capitalisation is minimum $50, or each of the total assets and revenue are $50 million in the previous year, or in the last two of three fiscal years

  • There is a minimum of 1,100,000 shares publicly traded with a market value of publicly traded shares of $15m and 400 round lot stockholders.

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