New Rules For FTSE Russell Index Provider To Exclude Snap, Others From Benchmarks

Global index provider FTSE Russell said Wednesday it plans to require companies on its indexes to have a minimum of 5% of voting rights in the hands of unrestricted shareholders, specifically citing Snapchat parent Snap Inc. in reaching that decision. The proposal represents "a pragmatic compromise" between those that believe Snap's IPO "set a dangerous precedent for companies to come to the market with few, if any, voting rights attached to their securities, and those respondents who believe the role of the index provider is to represent the investable opportunity set as comprehensively as possible," FTSE Russell said in a document. "The proposal set out here effectively draws a principled line in the sand," and changes, subject to potential further feedback, will be published on Aug. 25. Eligibility rules will become effective at the September quarterly and semi-annual index reviews, the company said. Snap raised more than $3 billion in its market debut in March; shares opened at $24 and on Wednesday closed at $13.40. Snap did not offer voting rights when it IPO'ed. The shares rose 0.2% late Wednesday.