In response to user feedback, the FTSE Practitioner Committees have agreed to fine tune FTSE’s free float adjustments by narrowing bandings for free float weightings to 20%, 30%, 40%, 50%, 75% and 100% on all its indexes from the current 25%, 50%, 75% and 100% levels.
FTSE is consulting with market users to ensure these changes are implemented at the most appropriate time. The latest date will be when all other free float changes come into effect on 15th June 2001.
Mark Makepeace, FTSE MD explained: “FTSE aims to provide the most accurate up-to-date and transparent index service to the market. Because we announced our free float policy to the market well ahead of our implementation date, we have had time to take user feedback on board and introduce refinements to FTSE Indexes to ensure that they deliver exactly what the market wants. Not all index companies use the same
FTSE pioneered the issue of free float following an extensive market consultation exercise in the summer of 1999. Prior to the consultation exercise, FTSE had adjusted its indexes to remove restricted government holdings in large privatisation stocks and restrictions on foreign investors. In response to the consultation exercise, FTSE extended its free float policy and began a phased introduction of free float adjustments to its indexes to be completed by June 2001. Since then, it has monitored market usage and incorporated feedback to ensure that its free float adjustments are completely in tune with the needs of users.
