Investing August 12, 2004

S&P Puts Out Index Float Adjustment Info Schedule

August 12, 2004 (PLANSPONSOR.com) - Standard & Poor's has released a schedule on when it will put out more information on the float adjustment of the S&P 500 and its affiliated US indices.
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As previously announced, Standard & Poor’s will transition the S&P 500, the S&P MidCap 400, the S&P SmallCap 600 and the S&P REIT Composite indices to 100% full float adjustment, where the share counts of stocks in the index are adjusted to eliminate strategic blocs of stock and cross holdings. 

The transition will be done in two phases. On September 28 after the close of trading, S&P will release:

  • an overview of Standard & Poor’s adoption of full float adjustment for the US indices
  • a description of Standard & Poor’s float adjustment methodology for the US indices
  • a list of the float factors (percentage of shares outstanding to be included in the indices) for all companies in the S&P 500, S&P MidCap 400, S&P SmallCap 600, and S&P REIT Composite indices
  • an analysis of the impact of the indices transition to float adjustment
  • a question & answer paper clarifying all details of the float adjustment implementation.

Then, on October 15, Standard & Poor’s will publish provisional half-float adjusted and full-float adjusted indices for its domestic indices.  These series will include history from September 19, 2003. 

Overall, the schedule for transition to full float is:

  • September 2004 – publication of details on Standard & Poor’s Web site.
  • March 18, 2005 – Official Standard & Poor’s Indices shift to half float adjusted indices where, for example, a company with an 80% float factor, will be adjusted to a 90% factor – halfway from 100% to 80%
  • September 16 ,   2005 – All official US indices shift to full float adjusted.

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