The new rules fall in line with the new international practice in this area.
The main changes are:
- Smaller interval, 5% intervals are introduced for free float
- Increased industry group representation in the index
- Free float adjustment of the company's portfolio of own shares
- Stricter free float adjustment within the individual industry group
The KBX Index will in future contain a more precise free float, as in future it will be rounded up to the nearest 5 per cent. This means that if a company at the coming review has a free float of 56.8 per cent, it will be included in the KBX Index with 60 per cent of the market value against 75 per cent today.
Increased industry group representation in the index
The target for the free float adjusted market value in each industry group is raised from 80 per cent to 85 per cent. This has been brought on by the fact that companies consolidate and become increasingly bigger with the result that an increasingly smaller number of share classes will be represented in the index. Based on the most recent selection, the consequence for the KBX Index would be that an 85 per cent target per industry group would increase the number of share classes by eight (8). Today, there are 51 share classes in the KBX Index.
Free float adjustment of the company's portfolio of own shares
A company's portfolio of own shares will in future be free float restricting.
Stricter free float adjustment within the individual industry group
If a listed company owns 10 per cent or more of another listed company within the same industry group, the portfolio will be free float restricting.
