FTSE / JSE Advisory Index Committee Announces Market Consultation On Free Float Indices

FTSE, the global index group, and the JSE Securities Exchange have appointed an independent Advisory Committee of market practitioners to oversee the new FTSE / JSE Africa Index Series. The Committee met for the first time in Johannesburg on Monday, 6 August 2001, and today launches a market consultation process on the introduction of free float.

The issues discussed by the Advisory Committee on Monday included:

• the Ground Rules which should be applied to and thus determine the structure of the new FTSE / JSE Africa Index Series which are intended to be introduced together with the JSE's new trading engine in May 2002;
• the impact and timing of introducing free float weightings and liquidity screens for all indices in the FTSE/ JSE Africa Index Series;
• new indices which could be introduced to best meet the needs of the participants in the South African market. In this regard, the Advisory Committee discussed the need to introduce low resource and total return indices as soon as possible.

A draft of the proposed Ground Rules to be applied to the FTSE / JSE Africa Index Series as well as a draft of the proposed free float criteria is available on the JSE's website, www.jse.co.za.

Anton Botha, the chairman of the Advisory Committee said: "the Committee encourages anyone who would like to make a written submission on the draft proposals, to do so by addressing the comments to indices@jse.co.za. The submissions should reach the JSE by no later than 30 August 2001."

Once the submissions have been received, the Advisory Committee will meet to finalise the Ground Rules. Similarly the proposed free float weightings of all listed companies will then be published for comment - FTSE and the JSE expect this to be late this year.

Mark Makepeace, Chief Executive, FTSE Group said: "This is a great opportunity for FTSE to show the local market the benefits of a free floated index, and give enough lead time to minimise costs."

Russell Loubser, Chief Executive, JSE Securities Exchange added: "The JSE is committed to bringing its indices in line with recognised global standards and looks forward to the input of the local market in achieving this."