S&P Dow Jones Indices Crack Down On Multi-class Share Structures

S&P Dow Jones Indices joined FTSE Russell in barring companies like Snap Inc. whose shares offer limited to no voting rights from inclusion in their indices. S&P Dow Jones Indices announced late Monday that the S&P Composite 1500, which includes the S&P 500 , S&P MidCap 400 and S&P SmallCap 600 , will no longer add companies with multiple share class structures effective immediately. However, existing companies in the indices with multiple classes are grandfathered in and so will not be affected by the change. Companies with multiple share classes and limited shareholder voting will still be included in the S&P Global BMI Indices and the S&P Total Market Index. Last week, FTSE Russell announced that companies need to give unconnected investors a minimum of 5% voting rights in the company to be included in their indices. That limit is effective in September for new IPOs and stocks already in their indices have five years to make the change.

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