There are other changes to the regulatory requirements, such as to the requirements around financial track record disclosure, significant and related transactions, and changes to the rules around dual class share structures. Do these changes have any impact to the index inclusion criteria?

September 16, 2024 06:39 PM BST | By Team Kalkine Media
 There are other changes to the regulatory requirements, such as to the requirements around financial track record disclosure, significant and related transactions, and changes to the rules around dual class share structures. Do these changes have any impact to the index inclusion criteria?
Image source: shutterstock

On July 29, 2024, the London Stock Exchange (LSE) introduced a revised listing regime that brought significant changes to the regulatory framework governing securities and their eligibility for inclusion in the FTSE UK Index Series. This new framework included the introduction of categories such as Equity Shares (Commercial Companies) and Closed Ended Investment Funds, designed to replace the previous Premium segment.

Under the updated regime, securities listed under the new categories are subject to a set of regulatory requirements tailored to the new framework. Notably, if companies meet the listing requirements for the Equity Shares (Commercial Companies) or Closed Ended Investment Funds categories, they become eligible for potential inclusion in the FTSE UK Index Series. This eligibility reflects a broader approach to index inclusion, aiming to represent a wider spectrum of market participants.

For instance, prominent companies like Diageo plc (DGE) and Vodafone Group plc (VOD), which may transition to the Equity Shares (Commercial Companies) category, would have the opportunity to be considered for inclusion in the FTSE UK Index Series, provided they meet all other relevant criteria. Similarly, Closed Ended Investment Funds such as JPMorgan Global Growth & Income plc (JGGI) and Fidelity Special Values plc (FSV), if listed under the new category, could also be eligible for inclusion in the index.

It is important to clarify that FTSE Russell, the organization responsible for managing the FTSE UK Index Series, has not introduced any additional inclusion requirements beyond those associated with the new listing categories. The criteria for inclusion in the index do not replicate the legacy Premium segment requirements. Instead, the new regime provides a more inclusive framework while maintaining the integrity and relevance of the index.

The absence of additional regulatory obligations means that companies meeting the listing requirements for the Equity Shares (Commercial Companies) and Closed Ended Investment Funds categories are evaluated for index inclusion based on the same principles applied to other securities within the FTSE UK Index Series. This approach ensures that the index continues to reflect a diverse range of market participants without imposing the previous Premium segment's stringent standards.

In summary, the revised listing regime introduced on July 29, 2024, enables companies listed under the Equity Shares (Commercial Companies) and Closed Ended Investment Funds categories to be eligible for inclusion in the FTSE UK Index Series, provided they satisfy the applicable listing requirements. FTSE Russell has not imposed additional inclusion requirements related to the legacy Premium segment, ensuring that the new framework supports a broader and more inclusive representation of the UK market.


Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Limited, Company No. 12643132 (Kalkine Media, we or us) and is available for personal and non-commercial use only. Kalkine Media is an appointed representative of Kalkine Limited, who is authorized and regulated by the FCA (FRN: 579414). The non-personalised advice given by Kalkine Media through its Content does not in any way endorse or recommend individuals, investment products or services suitable for your personal financial situation. You should discuss your portfolios and the risk tolerance level appropriate for your personal financial situation, with a qualified financial planner and/or adviser. No liability is accepted by Kalkine Media or Kalkine Limited and/or any of its employees/officers, for any investment loss, or any other loss or detriment experienced by you for any investment decision, whether consequent to, or in any way related to this Content, the provision of which is a regulated activity. Kalkine Media does not intend to exclude any liability which is not permitted to be excluded under applicable law or regulation. Some of the Content on this website may be sponsored/non-sponsored, as applicable. However, on the date of publication of any such Content, none of the employees and/or associates of Kalkine Media hold positions in any of the stocks covered by Kalkine Media through its Content. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music/video that may be used in the Content are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music or video used in the Content unless stated otherwise. The images/music/video that may be used in the Content are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated or was found to be necessary.


Sponsored Articles


Investing Ideas

Previous Next