Introduction
Dual-class shares – a stock setup where one class has more votes per share than another – allow insiders to retain control while raising public capital. Major stock indexes set rules on whether companies with these structures can join, affecting visibility and investment flows.
In early 2026, rules remain stable from late 2025. For the S&P 500 and related indices, S&P Dow Jones reversed its 2017 ban in 2023, making dual-class companies fully eligible if they meet other criteria like market cap and liquidity. No further changes occurred in 2025. FTSE Russell maintains its minimum voting rights rule from 2017, requiring developed market companies to have greater than 5% of total voting rights in unrestricted public hands; emerging markets are exempt. This threshold undergoes annual review but stayed at 5% through 2025.
Governance reports note increased dual-class inclusions in S&P indices post-2023, with examples like recent tech additions. FTSE adjustments remain rare, affecting only extreme cases.
Main Predictions for 2026 Index Rules
In 2026, major indexes will show greater acceptance of dual-class shares, with no major restrictions added and possible minor easing.
The S&P 500 will continue full eligibility for dual-class companies, leading to more additions from recent IPOs. This follows the 2023 reversal after consultation, aligning with broader market views. Predictions suggest 5-10 new dual-class entrants, based on 2024-2025 patterns like Rubrik and others. Committee discretion will favor high-growth firms, boosting passive fund flows.
FTSE Russell will keep the >5% public voting rights threshold, with annual review likely confirming it. No increase is expected, as prior consultations supported the level. Rare exclusions may occur for new listings falling short, but most dual-class firms comply via sufficient low-vote float. Russell indexes will add dual-class companies routinely, adjusting weights for free float.
Overall, 2026 dual-class acceptance will rise in practice, especially in U.S.-focused indexes. More companies will benefit from inclusion premiums without governance penalties. Trends from early 2026 data, like stable methodologies, support continuity with growing inclusions.
Challenges and Risks
Index rules accepting dual-class structures face challenges. Looser policies may reduce incentives for equal voting, raising concerns about minority shareholder protections.
In S&P indices, full acceptance could lead to more entrenched management, potentially overlooking poor governance in additions. Passive investors track indexes without voting influence, amplifying agency problems.
For FTSE, the 5% threshold might prove too low if backlash grows, prompting calls for hikes and disrupting constituents. Valuation impacts could emerge if institutions avoid dual-class heavy indexes.
Broader risks include regulatory pressure or investor shifts favoring one-share-one-vote, causing volatility in inclusions. In crises, dual-class firms in indexes might face higher scrutiny, affecting performance.
Opportunities
Accepting dual-class shares in indexes offers opportunities for comprehensive market representation and long-term growth capture.
S&P’s open policy allows inclusion of innovative companies, enabling investors to access visionary leaders via passive funds. This supports capital access for founders, fostering breakthroughs.
FTSE’s balanced threshold ensures basic accountability while permitting control retention, appealing globally. Opportunities include stable index composition and alignment with real economy structures.
In 2026, greater acceptance could enhance returns if dual-class firms outperform, as some studies suggest. It promotes inclusive benchmarks, benefiting diverse strategies.
Conclusion
In 2026, index inclusion rules for S&P and FTSE will demonstrate dual-class acceptance, with S&P fully open since 2023 and FTSE holding a mild 5% voting threshold.
Challenges like governance dilution exist, but opportunities for innovation capture and market reflection are notable. Trends favor continuity, aiding founder-led firms.
Beyond 2026, rules may evolve slowly toward balance, sustaining debate but supporting practical acceptance.
