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
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
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