The Tokyo Stock Exchange (TSE) is seeking public comment from market participants on plans to introduce free-float adjusted indices on TOPIX. TSE is planning to introduce free-float adjusted indices on TOPIX during or after 2005.
In particular, TSE wants public comment on whether existing TOPIX indices should be replaced by new free-float adjusted indices or new free-float adjusted TOPIX indices should be introduced in addition to the current indices. Secondly, it is seeking comment on the definition of free-float factors and fixed shares held by the ten largest shareholders (excluding investment trust funds).
The issue is of more than academic interest. “Once the free-float adjusted indices are introduced, investors who use TOPIX as benchmark may find it necessary to rebalance their portfolios,” says a spokesman for Mizuho Bank in Tokyo.