S&P Dow Jones Indices Clarifies Domicile Language for U.S. Indices

Rhea-AI Summary

On April 17, 2023, S&P Dow Jones Indices updated its domicile eligibility criteria for the U.S. Indices and Dow Jones U.S. Total Stock Market Indices methodologies. The change enhances transparency without altering domicile status for existing U.S. companies. The updated criteria specify that eligible U.S. companies must adhere to U.S. Securities Exchange Act reporting obligations, possess a significant U.S. presence in fixed assets and revenues, and have their primary listing on an eligible U.S. exchange. This clarification aims at ensuring consistent application of the domicile rules. The definition of a U.S. company can still include those with a “domicile of convenience” for tax reasons if their primary listing and operational headquarters are in the U.S. For further details, visit www.spglobal.com/spdji.

Positive

• Clarification of domicile criteria enhances transparency for investors.
• No changes to domicile status for existing U.S. companies, ensuring stability.

Negative

• None.

NEW YORK, April 17, 2023 /PRNewswire/ -- Effective April 17, 2023, S&P Dow Jones Indices ("S&P DJI") is clarifying one of the domicile eligibility criteria in the S&P U.S. Indices methodology and the Dow Jones U.S. Total Stock Market Indices methodology as detailed in the box below. This clarification will not result in any domicile changes for any U.S. companies, as it simply provides more clarity and transparency to the existing rule.

Previous Domicile Eligibility Methodology Statement	Updated Domicile Eligibility Methodology Statement
Files 10-K annual reports	Company is subject to U.S. Securities Exchange Act reporting obligations for domestic issuers, including requirements to file periodic reports such as, but not limited to, Form 10-K annual reports, Form 10-Q quarterly reports, and Form 8-K current reports.

Below are the full U.S. domicile criteria including the above wording update:

Domicile. Only common stocks of U.S. companies are eligible. For index purposes, a U.S. company has the following characteristics:

1. Company is subject to U.S. Securities Exchange Act reporting obligations for domestic issuers, including requirements to file periodic reports such as, but not limited to, Form 10-K annual reports, Form 10-Q quarterly reports, and Form 8-K current reports.

2. The U.S. portion of fixed assets and revenues constitutes a plurality of the total but need not exceed 50%. When these factors conflict, fixed assets determine plurality. Revenue determines plurality when there is incomplete asset information. Geographic information for revenue and fixed asset allocations are determined by the company as reported in its annual filings.

3. The primary listing must be on an eligible U.S. exchange as described under Exchange Listing below.

If criteria #2 is not met or is ambiguous, S&P Dow Jones Indices may still deem it a U.S. company for index purposes if its primary listing, headquarters, and incorporation are all in the U.S. and/or a "domicile of convenience". For further information on domiciles of convenience, please refer to S&P Dow Jones Indices' Equity Indices Policies & Practices Methodology.

In situations where the only factor suggesting that a company is not a U.S. company is its tax registration in a "domicile of convenience" or another location chosen for tax-related reasons, S&P Dow Jones Indices normally determines that the company is still a U.S. company.

The final determination of domicile eligibility is made by the Index Committee which can consider other factors including, but not limited to, operational headquarters location, ownership information, location of officers, directors and employees, investor perception and other factors deemed to be relevant.

The U.S. Indices methodology and the Dow Jones U.S. Total Stock Market Indices methodology documents are being updated to reflect the above changes. For more information about S&P Dow Jones Indices, please visit www.spglobal.com/spdji

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 products based on indices from any other provider in the world. Since Charles Dow invented the first index in 1884, S&P DJI has been innovating and developing indices across the spectrum of asset classes helping to define 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.spglobal.com/spdji.

FOR MORE INFORMATION:

S&P Dow Jones Indices
index_services@spglobal.com

Media Inquiries
spdji.comms@spglobal.com

View original content:https://www.prnewswire.com/news-releases/sp-dow-jones-indices-clarifies-domicile-language-for-us-indices-301799508.html

SOURCE S&P Dow Jones Indices

FAQ

What are the updates to the domicile criteria by S&P Dow Jones Indices on April 17, 2023?

On April 17, 2023, S&P Dow Jones Indices clarified its domicile eligibility criteria, enhancing transparency without changing domicile status for existing U.S. companies.

How does the updated domicile eligibility affect S&P Global (SPGI)?

The updates provide more clarity in the S&P Indices methodology, but there are no changes to the domicile status for current U.S. companies.

What does the domicile of convenience mean for U.S. companies?

A domicile of convenience refers to a company's tax registration in a location chosen for tax-related reasons, which may not affect its eligibility as a U.S. company if other criteria are met.

How does the domicile criteria impact investors in S&P Global (SPGI)?

The clearer rules help investors understand the eligibility and classification of companies within the indices, potentially affecting investment decisions.