Targeting SpaceX and other unicorns, Nasdaq's new "Fast-Track Inclusion" index rule will take effect on May 1.

Nasdaq announced on Monday that Nasdaq Global Indexes has approved amendments to the Nasdaq 100 index methodology rules, including the “fast entry” provision, effective May 1 of this year.

(Source: Nasdaq official website)

The Nasdaq 100 index is made up of 100 non-financial companies listed on Nasdaq. The index is tracked by hundreds of investment products worldwide, covering asset management规模 of more than $600 billion. This also means that global index fund investors are expected to indirectly hold these ultra-hot assets as soon as companies with enormous valuations such as SpaceX and OpenAI get listed.

As the most important adjustment in this update, the “fast entry” rule refers to the exchange evaluating a new stock on the seventh trading day after its IPO. If the company’s market value can reach the top 40 of the Nasdaq 100 index and it meets all eligibility requirements, the new stock will be quickly added to the Nasdaq 100 index after the 15th trading day following its listing.

Given that the current threshold for ranking within the top 40 of global listed-company rankings is roughly $300 billion, companies with valuations exceeding $1 trillion like SpaceX, $700–800 billion like OpenAI, and $3.8 billion like Anthropic are clearly the kinds of targets that the Nasdaq exchange is trying to attract with its new rules.

There have also been reports previously that, because of the proposed “fast entry” rule, SpaceX has been leaning toward listing on Nasdaq.

Under the current rules, for a newly listed company to be included in the Nasdaq 100 index, it must have traded for at least 3 calendar months (excluding the month in which the IPO occurs), and the index is adjusted only once a year in December.

(Source: Nasdaq)

Asked about the rationale for the adjustment, Cameron Lilja, head of Nasdaq Global Index Solutions, told the media: “Excluding a large-scale company that could hold a substantial weight in the index for the long term is not necessarily representative. We are seeing changes in companies’ equity structures and corporate structures, and more and more businesses choose to remain private for the long term before listing, so by the time they enter the public market, they have already grown into truly mega-cap companies.”

In addition to the “fast entry” rule, Nasdaq also introduced a new market-cap calculation method in the rule changes, counting both already-listed shares and unlisted shares in different equity classes in the market-cap calculation. The exchange also removed the rule that requires at least 10% of the float, but companies with a lower float ratio will receive a lower weight in the index. If a company’s weight in the index is consistently below 10 basis points (0.1%) for two consecutive months, it will be removed and replaced by the next company that meets the criteria and has a larger market cap.

From the exchange’s perspective, this rule change is also beneficial for attracting more companies to list. Nasdaq disclosed in a white paper last year that since 2000, the number of publicly traded companies listed on U.S. exchanges has decreased by one-third.

(Source: Caixin)