FTSE launches consultation on free float rules

The FTSE Group has launched a consultation on whether it should raise its minimum free float requirement from 15% to 25%.

Launching the consultation, the group said it had received a number of requests to raise the minimum free float requirement to 25%, in line with UK Listing Authority requirements.

Current rules require companies to have at least 15% of shares free to be traded, though this threshold falls as low as 5% in the case of companies with a market cap in excess of £3bn.

The UKLA already requires a 25% free float for a company to obtain a premium listing, but has made exceptions in the past for the likes of miner ENRC, which was again the subject of corporate governance concerns earlier this year when two directors were voted off its board.

Any FTSE All Share stocks with less than 25% free float would be grandfathered to allow them time to increase their proportion of freely-traded shares, the FTSE Group said.

The company said it was also looking at launching a set of indices prioritising higher corporate governance standards. The consultation on free float requirements closes on 25 November.