S&P Dow Jones Indices Consultation on Treatment of MegaCap Companies - Results
The Index Committee appreciates the market engagement received in connection with this consultation and thanks all respondents for their feedback.
S&P DJI's Index Committee continually monitors market developments to ensure indices meet their stated objectives and considers methodology changes as needed to help ensure its indices continue to do so.
Market consultations are the primary mechanism through which the Index Committee engages with market participants and other stakeholders to seek feedback on whether methodology changes are necessary or appropriate, and to assess potential methodology developments. Consultations also provide an opportunity for any member of the public to submit input. This process is designed to preserve the independence of the Index Committee, effectively mitigate potential conflicts of interest, and help ensure transparency and fairness.
The Index Committee carefully reviews all consultation responses received. However, while all responses are reviewed and considered, the Index Committee is not bound by any comments or information submitted as part of the consultation.
S&P 500, S&P MidCap 400, and S&P SmallCap 600 Results:
Based on S&P DJI's Index Committee review of the markets and after consideration of responses received from a wide range of market participants, no changes will be made to the eligibility criteria including financial viability screens, seasoning period, or minimum IWF, for the S&P 500, S&P MidCap 400, or S&P SmallCap 600 as a result of the S&P Dow Jones Indices consultation on the treatment of MegaCap companies. Accordingly, there will be no changes to existing methodology for this index family.
S&P DJI determined that exceptions to the financial viability, seasoning, and IWF requirements should not be granted solely based on market capitalization. The decision not to adopt the proposed exceptions preserves core index principles by maintaining consistent application of these key requirements. Although there may be trade-offs between strict adherence to these eligibility requirements and broad representativeness, the current methodology provides substantial market coverage and sector balance. As a result, the indices can continue to meet their stated objectives while preserving their role as representative and investable benchmarks for the
The table below summarizes the consultation results.
Proposed | Methodology | |
Changes | Current | Result |
IPO Seasoning | Initial public offerings should be traded on an Spin-offs or in-specie distributions from existing Companies that migrate from an ineligible | No Change |
Investable | To be eligible for addition, a stock must have an Companies passing the total company level market | No Change |
Financial | S&P Composite 1500. Generally Accepted o the most recent quarter, and o the sum of the most recent four consecutive Rule Exceptions. Exceptions to the above criteria • Migrations from one S&P Composite 1500 index • Companies that are spun-off from current S&P • Non-S&P Composite 1500 companies that | No Change |
S&P Total Market Index (TMI), S&P Completion Index (CI), and Dow Jones
The S&P Total Market Index (TMI), S&P Completion Index (CI), and Dow Jones
Proposed | Methodology | |
Changes | Current | Result |
MegaCap | -- | -- |
Investable Weight
| To be eligible for addition, a stock must have an | To be eligible for addition, a stock must have • IWF of at least 0.10, or • Float-adjusted market capitalization Current constituents have no minimum |
Investable Weight
| To be eligible for addition, a stock must have an | To be eligible for addition, a stock must have • IWF of at least 0.10, or • Float-adjusted market capitalization Current constituents have no minimum |
An IPO that meets the requirements of the updated Investable Weight Factor (IWF) eligibility rule is eligible for fast-track entry, provided the company meets all other applicable fast-track criteria as well. Fast-track assessment is made using the closing price on the first day of trading on an eligible exchange. Once S&P Dow Jones Indices announces that an IPO is eligible for fast-track addition, it is added to the index with five business days' lead time. For more information on IPO fast track entry, see the relevant index methodology.
Float Release after the end of IPO Lock-Up Period
Consultation respondents generally supported implementing float increases following the release of lock-up shares gradually, or in tranches where appropriate, depending on company-specific circumstances.
S&P DJI applies the published methodology as the default approach. In accordance with the Index Committee's governance framework, the Index Committee may, in certain circumstances, exercise discretion in the implementation of float increases after the end of the IPO lock-up period to reduce market impact, support replicability, and promote orderly implementation, taking into account company-specific facts, such as size of the index event and timelines.
Any such decision will be communicated in advance where possible.
IMPACTED INDICES
Index Name | Index Code |
S&P Total Market Index (TMI) | SPTMI |
S&P Completion Index (CI) | SPCMI |
Dow Jones | DWCF |
Please note that if a company is included within the above indices, such company may become eligible for derived indices that use the above index as a starting universe. For example, the derived indices include, but are not limited to, size, sector, style, factor, and sustainability indices derived from the impacted indices. Please refer to the individual index methodologies for more information on eligibility and timing.
IMPLEMENTATION TIMING
S&P DJI is implementing the above described methodology changes to the S&P Total Market Index (TMI), S&P Completion Index (CI), and Dow Jones
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