Change follows concerns over illiquidity and corporate governance in UK-incorporated foreign companies listed on London
We reported in this post on 2 November 2011 on the reasons for the FTSE Group’s market consultation on its minimum free float requirement for the FTSE UK Index Series. Inclusion in that Series makes it much more likely that index-tracking funds will have to invest in a company’s shares – which, given a choice, they may not wish to do if the vast majority of the shares are tightly-held by founders, oligarchs or foreign governments. A tightly-held company may give rise to concerns about illiquidity in the traded shares or about poor corporate governance.
The FTSE Group announced the results of its consultation today. It is moving to a minimum free float requirement of 25% (from 15%).
