| FTSE Russell adopted a rule change that will speed the addition of newly listed large-cap companies to its main indexes, weeks ahead of SpaceX's expected record-breaking initial public offering. Under the policy announced late Tuesday, IPOs with investable market capitalizations above the cutoff for the Russell Top 500 will qualify for so-called fast entry after their fifth trading day. Previously, eligible companies were assessed during quarterly reviews. "The introduction of a fast entry mechanism for sizable IPOs enables the indexes to reflect significant market developments more promptly," Arne Noack, head of equity and multi-asset indices, Americas at FTSE Russell, wrote in a statement. The index provider, owned by London Stock Exchange Group Plc, is following a similar move by Nasdaq Inc. earlier this year aimed at accommodating potential megadebuts. The changes highlight pressure on index providers to adapt as companies stay private longer and go public at much larger valuations. Nasdaq - the expected listing venue for SpaceX - already shortened the waiting period for index inclusion to 15 days from at least three months. S&P Dow Jones Indices is still evaluating possible revisions. More than $30 trillion in assets globally are benchmarked to indexes whose inclusion rules are either already in effect or under review. The push for faster inclusion has raised concerns among some investors, who say adding IPOs too quickly could expose passive funds to greater volatility and force them to buy shares before reliable market pricing is fully established. ALSO READ: SpaceX IPO: The Five Future Businesses Elon Musk Is Betting Billions On FTSE Russell in February sought market feedback on the proposal, including a review of existing free-float and voting-rights requirements. Under the revised framework, investable market capitalization will be calculated using the free-float shares available for trading at the IPO and the stock's closing price on the first day of trading. This year, attention has centered on SpaceX, whose targeted $75 billion IPO would shatter records for a public debut. Other mega-cap private firms, including OpenAI and Anthropic, are also laying the groundwork for eventual listings. |
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