STOCKHOLM, Sweden, March 05, 2002 (PRIMEZONE) -- The common rules of index methodology(NOTE 1) within NOREX have been revised after a period of successful production. The revision has been carried out on the basis of feedback from market participants in Denmark, Norway and Sweden and analysis within the NOREX Index Group. The changes will be effective from 1 July 2002.
The changes apply to the following main issues:
- Stricter banding ranges, 5% banding ranges in the free float
approach.
- Free float adjustment for company owned shares.
- Increased target market industry representation.
- Stricter free float adjustments within the same industry group.
Stricter banding ranges, 5% banding ranges in the free float approach NOREX has decided to change the NOREX banding rules to 5% banding ranges. A constituent's inclusion in the index is equal to its estimated free float rounded up to the nearest 5%. This will improve the ability to capture the "fair" free float of index constituents and improve the index constituent's investability and the overall investability of the index. For example, a constituent security with a free float of 56.7% will be included in the index at 60% of its total market capitalisation.
Free float adjustment for company owned shares
Company owned shares will be considered as "Company Insider Stakes" and adjusted for in the free float approach.
Increase in target market industry representation from 80% to 85%
NOREX has decided to increase the target market cap industry representation from 80% to 85%. This is in relation with the ongoing market concentration, and the increased coverage is intended to provide a greater diversification and representation of market opportunities.
Stricter free float adjustments within the same Industry Group
NOREX has decided to undertake stricter free float adjustments for investments within the same Industry Group. Shareholdings larger than 10% within the same Industry Group will be adjusted for.
The changes will be published at the end of March in "Rules for the Construction and Maintenance of the NOREX Exchanges All-Share, Sector and Benchmark Indices." The periodic review of the benchmark indices on May 31, 2002 will then be affected by the change in the rules. The revised indices will be effective on July 1, 2002.
NOREX Alliance is a strategic alliance between independent exchanges with the aim of offering investors, issuers and exchange members a cost- effective Nordic securities market of a high quality. The NOREX Alliance is unique as it is the first exchange alliance with a joint trading system in operation with harmonised trading rules and membership criteria for the participating countries. The Alliance consists of Copenhagen Stock Exchange, Iceland Stock Exchange, Oslo Bors and Stockholmsborsen. Iceland Stock Exchange is not yet a part of the index methodology
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