The Swiss Market Index, usually referred to as SMI, is the most important blue-chip stock market index in Switzerland. It monitors the performance of the top 20 publicly traded stocks on the Swiss Stock Exchanges, including Bazel, Zurich and Geneva. Representing the major liquid stocks on the market, the SMI was introduced in 1988 with a baseline of 1500 points.
Reflecting the Swiss stock market performance, the SMI imposes strict acceptance requirements for stocks, mainly regarding market capitalisation and liquidity. Firstly, the involved should ensure that their stocks represent at least 50% of the average liquidity of other stocks in the SMI. Secondly, the free-float capitalisation should comprise minimum 0.45% of the entire Swiss Market capitalisation. The index composition is traditionally revised once a year, on the 3rd Friday of September.
In 2007, the SMI underwent a significant restructuring. Before this date, the index was comprised of the listed stocks of 25 most prominent companies. However, the last 5 stocks were removed, and since then the index has been including only 20 stocks in total.
The ranking position of each company is determined by a combination of two criteria: the free-float market capitalisation for the previous year and the company's turnover for the same period.