Dan Bortolotti

index that is a non-issue today.

But the rule, I think it's probably still part of the index methodology in Canada that no company can represent more than 10% of the index.

And no company in Canada currently is very close to that.

But that goes back to the old Nortel days in the

late 90s, early 2000s, when one company represented more than 30% of the index.

And they said, we get it.

The index is supposed to represent the market.

But this is really a pretty egregious bit of poor diversification with a single company representing one third of the country.

So we're going to put in this rule because it just seems sensible.

Now, is it arbitrary?

Maybe.

Is it defensible?

I think so.

It's basically a circuit breaker.

It's not really there to shape the index on an ongoing basis.

It's just there as a guard in case something gets really inflated.

and presents an unusual concentration risk to index investors.

This seems like it's kind of motivated by the same thing.

The rules almost always work, but when some really strange situation comes about and you've got an IPO valued at $2 trillion, something that's never happened before, that maybe it's worth at least questioning

the original rules and tweaking them.