Responding to concerns that big shareholders can exert undue influence on firms traded on London's FTSE 100 index, owner FTSE Group is lifting its minimum free float rule to at least 25%, the company said Wednesday.

FTSE, which operates indexes including the U.K.'s blue-chip FTSE 100, said in a statement that in a market consultation 83% of respondents said the FTSE should apply a minimum free float threshold of 25% for U.K.-incorporated companies in FTSE indexes. The previous threshold was 15%, with exceptions for some very large companies.

The move is designed to assuage concerns among investors that companies without clear corporate governance rules can use loopholes to be included in the index. Investment lobby groups and corporate governance advocates have expressed concern that majority investors are able to exert their influence over others in a FTSE firm with a limited free float.

"With the guidance and direction of FTSE's independent practitioner committees, FTSE regularly consults the market on changes to the ground rules of its indices to ensure that the indices continue to meet investors' requirements and define and lead global standards in indexing. Both FTSE group and our shareholder, the London Stock Exchange Group, recognize that this strong stance on governance underpins the value of our business."

The FTSE policy change will give companies whose free floats now fall below the 25% threshold two years either to raise their free float or lose their index status. It applies only to U.K.-incorporated companies included in the FTSE All-Share index, which includes the FTSE 100, the FTSE 250 index and the FTSE 50 index.

The rule will come into force for new entrants Jan. 1, 2012.

The five companies that would be affected by the policy changes are Essar Energy PLC (ESSR.LN), Eurasian Natural Resources Corp PLC (ENRC.LN), Evraz Group PLC (EVRZ.LN), Fresnillo PLC (FRES.LN), and Ferrexpo PLC (FXPO.LN), people familiar with the matter said. All are U.K.-listed resource companies in the FTSE 100 index and are domiciled in the U.K.

-By Jessica Hodgson, Dow Jones Newswires; +44 (0) 7561 424788; jessica.hodgson@dowjones.com