British Stock Index to Change.

• Position: FTSE 100 index to use free float rules - Brief Article

Public fund investors--particularly pension fund managers--may be interested to learn that index investing is about to change in Britain. FTSE International, which manages the FTSE 100 index, has elected to issue new rules governing "free float." The term refers to shares of stock that can be freely traded. The size of a company may not correspond to the proportion of its equity that investors can buy and sell in the market. For example, the article cites the case of a German shareholder who owns a large percentage of stock in Deutsche Telekom. In such instances, the total value of stock available to investors (the free float) is much smaller than the market value of the company, which makes trading less liquid and...