Comptrollers of several large states sending legal demand letters to NASDAQ, FTSE Russell, and LSE for justification of their index rule changes before the SpaceX IPO

https://www.reuters.com/legal/government/states-challenge-nasdaq-ftse-russell-fast-tracking-spacex-2026-06-11/ https://comptroller.nyc.gov/reports/letter-to-the-london-stock-exchange-group-and-ftse-russell-re-spacex/ “In light of those interests and our respective fiduciary duties, we respectfully request that the London Stock Exchange Group (LSEG) and FTSE Russell reconsider the implementation of the Russell US Indexes IPO fast-entry rule and related eligibility changes, given deep concerns about their potential negative impacts on investors in Russell index-tracking funds. We further request that FTSE Russell publicly disclose the analysis conducted during the consultation process to justify these changes. This includes any analysis of the total market impact of Russell’s rule changes in light of a cascading series of eligibility revisions from other major index providers that seem likely to expose clients to unprecedented volatility over the pending SpaceX IPO… Did FTSE Russell conduct a formal data-driven analysis of the impact of the fast-entry rule on investors in Russell index-tracking funds before adopting the change? Given that the consultation document states that “no IPO would have been added” under this rule in the past five years, what forward-looking modeling analysis was conducted? If such an analysis exists, we request that it be disclosed publicly. What specific risk analysis was conducted concerning low-float stocks regarding higher price volatility, wider bid-ask spreads, and greater susceptibility to market manipulation? Any such analysis should be disclosed publicly. Did FTSE Russell evaluate the specific market impact risk created by allowing a stock with approximately 2% investable float to enter the Russell indexes within five trading days of its IPO? Did it model the price impact of $1.15+ billion in indexed buying on a float this small, especially when compounded by simultaneous fast-entry buying from the Nasdaq-100 and CRSP indexes? Did FTSE Russell assess whether the five-day inclusion window, which falls within the permitted Regulation M stabilization period, would result in index funds purchasing before the conclusion of that period and before subsequent unsupported price discovery? Did FTSE Russell consider requiring that inclusion occur only after the stabilization period ends?” The SEC still obviously completely AWOL. But it looks like this story could actually get pretty interesting.