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Daily Insurance Industry News
Monday 23rd of April 2018
December 15, 2011

NAPF comments on hike in FTSE free float rules

by Gill Montia

Story link: NAPF comments on hike in FTSE free float rules

The National Association of Pension Funds (NAPF) has commented on the FTSE Group’s decision to increase the minimum free float threshold for UK incorporated companies to 25% of a company’s equity.

According to NAPF’s head of corporate governance, David Paterson, the move is a step in the right direction but it doesn’t go far enough.

He explains: “In reality the 25% minimum does not provide the protection for minority investors which is derived from being able to block a majority shareholder resolution.”

He adds: “FTSE should set up a clear timetable for reviewing the 25% minimum as we believe that shareowners would be better served by a move towards 50%.”

The new FTSE Group policy does not affect companies incorporated outside of the UK, which are already subject to a higher free float threshold of 50%.

However, Mr Paterson believes there is a possibility of overseas companies avoiding the need to have a 50% free float by incorporating in the UK or by using a UK shell holding company.

NAPF, which represents 1,200 UK pension schemes with around 15 million members and assets of around £800 billion, has already written to the chief executive of the FTSE Group expressing its concerns on free float rules.

 

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