NEW YORK — S&P Dow Jones Indices opened a consultation on April 30, 2026, titled 'Consultation on the Treatment of MegaCap Companies.' The proposal considers waiving three key listing requirements for companies classified as MegaCap.
According to S&P Dow Jones Indices, a MegaCap company is defined as one with a total market capitalization at least equal to the 100th-largest company in the S&P Total Market Index, approximately $112 billion. The proposed rule changes would reduce the required public trading seasoning period from 12 months to six months, eliminate the requirement for four consecutive quarters of positive GAAP earnings, and lower the minimum public float requirement from 10% to an Investable Weight Factor of 0.10.
The public comment period for the consultation closed on May 28, 2026. If adopted, the changes would take effect before the market opens on June 8, 2026.
Corporate governance expert Nell Minow criticized the proposal, saying, "They had to bend the rules to get into the Nasdaq index—they would never qualify normally." She added, "It’s the opposite of what an index is supposed to be. An index is supposed to say, we will do the work for you, we will only put into the index companies that meet these specific qualifications. And then they’re sneaking some in."
As of December 2024, S&P Dow Jones Indices estimated that $20 trillion in assets were benchmarked to the S&P 500, with approximately $13 trillion in passively managed funds. Passive funds are required to purchase any stock added to the index they track, regardless of price or liquidity.