FTSE International To Introduce Capped Versions Of FTSE 100 & FTSE All-Share indices

FTSE International is intending to introduce capped versions of the FTSE 100 and FTSE All-Share. Currently it is proposed that a limit, or cap, of 10% for any single stock should be imposed. There will be no change to the existing FTSE 100 and FTSE All-Share indices which will continue to be calculated on an uncapped basis. The current FTSE 100 and FTSE All-Share accurately reflect the underlying UK market and we expect that these will continue to be used by the majority of investors and as the basis for derivative contracts. In order to prevent confusion with the existing indices the new additional capped indices will be individually branded and given a different index value to the existing FTSE 100 and FTSE All-Share. The indices will be back dated and values from 1 February 2000 will be made available. Currently, FTSE International is planning to introduce these new capped indices in March 2000 and, initially, the capped indices will be calculated once at the end of each business day. A real-time version of the capped FTSE 100 may be introduced at a later date. FTSE International is seeking the market's views on the above issues and, in particular, how often capped stocks should be reviewed and the indices rebalanced. Following some early feedback from the market the initial proposal is to review capped constituents on a quarterly basis. Any views on this issue should be submitted to FTSE International by 25 February 2000 by email (consultation@ftse.com).