Four major US states are pressuring Nasdaq and FTSE to review their new criteria, fearing it will favor SpaceX's premature inclusion in the index.

Pension fund managers from four major US states have sent letters to Nasdaq and FTSE Russell urging them to delay the implementation of new stock selection criteria that could pave the way for SpaceX, OpenAI, and Anthropic to be included in major indices sooner.

June 12, 2569 at 02.31:XNUMX a.m., Reuters reported that Fund managers and treasury officials from four major US states are demanding clarification from Nasdaq and FTSE Russell regarding recent changes to their index selection criteria. This is seen as benefiting SpaceX and large companies preparing to go public, and there are requests to delay the enforcement of the new rules until a comprehensive assessment of the impact on investors can be conducted.

A letter sent to Nasdaq and FTSE Russell, a copy of which Reuters obtained, expresses concerns that SpaceX's $7.5 billion public offering could pose significant risks to many investors through passive fund mechanisms.

These officials believe that SpaceX's record-breaking valuation, along with its centralized governance structure, could lead to price volatility and conflicts of interest between the index provider and its users.

These concerns arose after Nasdaq and FTSE Russell adjusted their inclusion criteria, lowering certain requirements such as the minimum trading period after listing, which would allow larger companies to be included in major indices more quickly, while S&P Dow Jones continues to use its original criteria.

In the letter to FTSE Russell, the signatories stated that they requested the FTSE Russell Index Oversight Board to review its changes to the methodology for calculating and selecting stocks, and that it should not prioritize the interests of listed companies and underwriters over the interests of index fund investors who may be exposed to the risk of misvaluation.

The letter was signed by Thomas DiNapoli, Inspector-General of the New York State Treasury; Mark Levine, Inspector-General of the City of New York; Michael Freerichs, Treasurer of Illinois; and Brooke Lirman, Inspector-General of the Maryland Treasury, all of whom oversee vast amounts of government pension assets, including index funds that might automatically purchase SpaceX shares if the company is included in a major index.

Meanwhile, officials from Illinois, Maryland, and Oregon also sent similar letters to Nasdaq, urging them to suspend the enforcement of the new criteria until a formal analysis of the impact on investors is completed.

“If such a study exists, we request that it be made public. If not, we request clarification on why rule changes affecting over $1.4 trillion in investor assets were made without a supporting impact assessment.” The letter states:

In addition, government officials want to know how Nasdaq manages internal conflicts of interest and which companies, including SpaceX or its advisors, were involved in pushing for the new regulations.

sideElizabeth Steiner, Treasurer of Oregon. She stated that she was deeply concerned about the stock market's operations, as they could force pension funds and institutional investors to buy stocks through index funds even though those stocks had not yet been adequately proven or tested by market conditions.

However, Nasdaq clarified that the structure of the capital market today is significantly different from that of a decade ago, with companies choosing to remain private for longer periods, entering the market at higher valuations, and having more complex stock structures.

“The revisions to the Nasdaq-100 criteria reflect these changes and have been implemented through a formal public consultation process.” A Nasdaq spokesperson stated, confirming that the change was not designed to favor any particular company and is consistent with the approach other major index providers are taking to respond to the new dynamics of capital markets as well.

refer : reuters.com

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