The CAC 40 is a benchmark French stock market index. As name suggests the index comprises of the 40 most significant values among the 100 highest market caps on the Paris Bourse which has now been changed to Euronext Paris). The name comes from the Paris Bourse's early automation system Cotation Assistée en Continu (Continuous Assisted Quotation).
The CAC 40 index was launched on 31 December 1987 with base value of 1000. The index's weighting system was changed from total market capitalisation to free float market cap only on 1st December 2003.
A quarterly review of the CAC 40 index composition is done by an independent Index Steering Committee. The changes made by the review committee get effected after a minimum of two weeks. At each review date, the companies are then ranked according to free float market capitalisation and share turnover over the prior 12 months of which 40 companies are selected from the top 100 companies in this ranking.