Clarification to Domicile Language for S&P U.S. Indices

The announcements by a number of companies across Europe, the UK and South Africa of an intention to change their primary listing to the United States have put U.S. listings in the spotlight. One driver of the interest in U.S. listings is eligibility for inclusion in the major U.S. indices, such as the S&P Dow Jones Indices ("S&P DJI"), Russell U.S. Indices and CRSP U.S. Total Market Index.

U.S. indices have varying eligibility rules and selection methodologies which are updated and clarified periodically. In April 2023, the S&P DJI issued a clarification to the first of its three U.S. domicile criteria. Previously, a company needed to file annual reports on Form 10-K to be considered for index inclusion eligibility. This was widely interpreted to include foreign private issuers electing to comply with domestic U.S. reporting requirements. The expanded methodology clarifies that a company has to be “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.” The S&P DJI noted that the updated wording "will not result in any domicile changes for any U.S. companies, as it simply provides more clarity and transparency to the existing rule." The eligibility of foreign private issuers electing to file on domestic U.S. forms is unlikely to be impacted by the clarification, although this was not specified in the announcement. 

Our SEC Transactions and Compliance Group provides public company advice to foreign private issuers across a variety of sectors who are listed or transacting in the U.S. The Group advises on the full spectrum of SEC matters and is made up of lawyers from across the Linklaters network.