An event initiated by a corporation that impacts its shareholders. Examples include: mergers, spin-offs, stock buybacks and stock splits. These events are monitored by the FTSE operations team in order that an adjustment can be made to the index divisor to counteract the effect that the change would have on the index. As all FTSE indices attempt to replicate the value of a given portfolio of stocks the divisor is therefore increased so that the index value does not change when the new shares in issue figures are implemented in the index and hence the capitalisation of the index rises.
A corporate action is an action taken by a publicly listed company relating to the entity's securities. Examples of corporate actions include mergers, rights issues, bonus issues, changes of name or code, or capital returns.