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ABI wants ban on tracker funds investing in new listings

The Association of British Insurers is calling for restrictions on tracker funds investing in newly listed companies due to concerns they are artificially inflating prices, The Mail on Sunday reports.

The ABI is looking to put forward a plan to prevent newly listed firms from joining the FTSE 100 or other leading indices until after a three-month cooling-off period.

This would prevent tracker funds from participating in a new share issue during that period.

The move follows concern that tracker funds provide an artificial boost to new listings on a the back of a number of large commodities and mining groups that have listed in London and been promoted straight into the FTSE 100.

Any proposal would have to be implemented by FTSE International.

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