2. Application of free-float weighting and 15% ceiling — The IEIF Scientific Committee has decided that the weightings of stocks in the Euronext IEIF SIIC France index should be based on free-float capitalization with effect from 5 July 2004. Free-float weighting, which is widely used for major indices around the world, ensures a closer match between the place of companies on the market and their weight in the index. By the same token, it limits the danger of index volatility that can result from an excessive discrepancy between the weight of a stock in the index and the volume of shares actually available to the market.
Free-float of the stocks making up the Euronext IEIF SIIC France index is calculated annually on the basis of the information available and rounded up to the nearest whole multiple of 10% above. Adjustments may also be made in the course of the year in the event of transactions increasing or decreasing float by 10% or more.
The weighting of any single stock may not in any case exceed 15% of the free-float capitalization represented in the index. This is to avoid overweighting of individual stocks and ensure a representative sample. A document detailing index methods is available on request from IEIF and Euronext.
