S&P GLOBAL, INC. NEW YORK, Aug. 1, 2016 /PRNewswire/ -- S&P Dow Jones Indices today announces updates to the S&P U.S. Indices methodology:
Share Freeze Period: Effective immediately, S&P Dow Jones Indices (SPDJI) is updating its quarterly rebalance share freeze period to provide greater transparency and clarity to clients regarding the freeze period surrounding the major quarterly rebalances. Previously, SPDJI implemented a share freeze the week leading up to the rebalancing effective date. Under the updated methodology, the freeze period begins after the market closes on the Tuesday preceding the second Friday of each rebalance month (March/June/September & December) and ends post market close on the third Friday of a rebalance month. This updates gives clients a clear reference date for changes that will be included in an upcoming rebalance.
Eligibility of Tracking Stocks: As a result of feedback received from a recent consultation, SPDJI will include all eligible existing tracking stocks in S&P Total Market Index (SPTMI) effective with the September, 2016 rebalance. Previously, tracking stocks were ineligible for S&P US Indices. This change helps align the SPTMI with the S&P Broad Market Index (SPBMI) and other broad based indices, which already include tracking stocks. Please note that any tracking stock issued as a result of a mandatory event will be permanently added to SPTMI on the ex- date.
Tracking stocks will continue to be ineligible for inclusion in the S&P Composite 1500 (which includes the S&P 500, S&P MidCap 400 & S&P SmallCap 600). Owners of tracking stocks typically do not have any legal claim on a company's assets, and tracking stocks do not have any separate corporate governance or management structures. Therefore, the U.S. Index committee deems them to be ineligible for the S&P Composite 1500.
Treatment of Voluntary Exchange Offers, Dutch Auctions & Tender Offers: Effective immediately, changes in a company's total shares outstanding of 5% or more due to voluntary exchange offers, Dutch auctions & tender offers will be made weekly rather than as soon as reasonably possible, which is the current policy. This is being done to align practices globally and to ensure replicability and appropriate lead time for implementation of these non-mandatory event types.
Reference date for additions to SPTMI: Effective with the September, 2016 rebalance, the reference date for IPO inclusions in SPTMI will be five weeks prior to the effective rebalance date and additions will be effective at the open of Monday following the third Friday of March, June, September and December. Previously, the reference date was the last trading day of the month prior to rebalance. This change helps align the SPTMI with the SPBMI and other broad based indices which already use this reference date.
Special Dividends: Based on consultation feedback, SPDJI will not be changing its treatment for special dividends. However, to provide for additional transparency and clarity, SPDJI will generally consider the third consecutive instance of a non- ordinary dividend (in terms of timing, not amount) to be ordinary for index purposes as a third consecutive instance will now be considered to be part of the normal payment pattern established by the company.
Following is a summary of changes:
Change Current Methodology New Methodology
------ ------------------- ---------------
Share Freeze period will S&P Dow Jones U.S. Indices A share/IWF freeze period is
begin after the market closes implements a share freeze the implemented during each
on the Tuesday preceding week leading up to the quarterly rebalancing. The
the second Friday of each rebalancing effective date freeze period begins after the
rebalance month market closes on the Tuesday
(March/June/September & preceding the second Friday of
December) and will end post each rebalance month
market close on the third (March/June/September
Friday of a rebalance month. & December) and ends post
market close on the third Friday
of a rebalance month.
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Tracking Stocks will be Tracking stocks are ineligible S&P Dow Jones Indices
eligible for inclusion in for US Indices (SPDJI) will include
SPTMI, but will continue to tracking stocks in S&P
be ineligible for inclusion in Total Market Index
S&P Composite 1500 (SPTMI) effective with the
September, 2016
rebalance.
Tracking stocks will continue to
be ineligible for inclusion in the
S&P Composite 1500.
--- -------------------
Voluntary exchange offers, Changes in a company's total Changes in a company's total
Dutch auctions and tender shares outstanding of 5% or shares outstanding of 5% or
offers will be implemented more due to exchange offers, more due to exchange offers,
with the weekly share Dutch auctions & tender offers Dutch auctions & tender offers
updates are made as soon as are made weekly
reasonably possible
--- -------------------
Reference date Reference date was the last The reference date for IPO
for additions to SPTMI trading day of the month prior inclusions in SPTMI will be
will be five weeks prior to the to rebalance. five weeks prior to the
effective rebalance date effective rebalance date
and additions will be
effective at the open of
Monday following the third
Friday of March, June,
September
and December.
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Special Dividends: Special dividends are those SPDJI will generally
Clarification of when SPDJI dividends that are outside of consider the third
considers a non-ordinary the normal payment pattern consecutive instance of a
dividend to be ordinary for established historically by the non- ordinary dividend (in
index purposes corporation. terms of timing, not
amount) to be ordinary for
index purposes as a third
consecutive instance will
now be considered to be
part of the normal payment pattern
established by the
company.
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Please refer to the S&P U.S. Indices Methodology and the S&P Equity Indices Policies and Practices Methodology for further details. For more information about S&P Dow Jones Indices, please visit www.spdji.com.
ABOUT S&P DOW JONES INDICES
S&P Dow Jones Indices is the largest global resource for essential index-based concepts, data and research, and home to iconic financial market indicators, such as the S&P 500® and the Dow Jones Industrial Average®. More assets are invested in products based on our indices than based on any other provider in the world. With over 1,000,000 indices and more than 120 years of experience constructing innovative and transparent solutions, S&P Dow Jones Indices defines the way investors measure and trade the markets.
S&P Dow Jones Indices is a division of S&P Global (NYSE: SPGI), which provides essential intelligence for individuals, companies, and governments to make decisions with confidence. For more information, visit www.spdji.com.
FOR MORE INFORMATION:
David Blitzer
Managing Director and Chairman of the Index Committee
New York, USA
(+1) 212 438 3907
david.blitzer@spdji.com
Soogyung Jordan
Global Head of Communications
New York, USA
(+1) 212 438 2297
soogyung.jordan@spdji.com
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SOURCE S&P Dow Jones Indices
