FTSE Russell to allow Euro and Dollar share prices
FTSE Russell have announced that companies with a Euro or a Dollar share price will be allowed to list on the FTSE UK index from September.
Currently, only securities trading in Sterling are eligible for inclusion – but there will still be requirements around UK nationality when listing.
No companies currently have the ability to take advantage of the rule change, but the new methodology applies to firms already listed on the FTSE UK.
The index provider has also announced a rule change that would “lower the fast entry thresholds” for FTSE UK indices.
New entries can now graduate up to the FTSE 100 or 250 within days of listing, depending on the size of the company.
Under the new rules, a firm must rank 225th or above and have an investible market cap of £1 bn on its first day of trading.
Mark Austin, a partner at the law firm Latham & Watkins and a member of the Capital Markets Task Force, said in a LinkedIn post “Bravo FTSE Russell”.
Austin told City PM that “removing the friction of needing a sterling share price to be included in the FTSE 100 or 250 is an enlightened and welcome move by FTSE Russell.”
“For large international companies who are considering where to go public in the coming private to public capital cycle, being able to list in London with a euro or dollar share price and still get index inclusion and so pick up passive demand is very significant.”
FTSE Russell says that it will review the Fast Entry Thresholds on an annual basis.
David Sol, FTSE Russell’s global head of policy, says “we regularly look at the methodology of our indices to ensure they continue to represent the underlying market and sectors”.
“Whilst there will be no immediate impact on the index composition, these two changes will give the FTSE UK Index Series a timely and more accurate representation of companies that can list in London today and in the future”.
On Monday, the FTSE 100 soared to an all-time high as defence stocks were boosted by European leaders committing to bolster spending.