S&P Dow Jones Indices Consultation on Treatment of MegaCap Companies - Results - Jun 4, 2026
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S&P Dow Jones Indices Consultation on Treatment of MegaCap Companies - Results
NEW YORK, June 4, 2026 /PRNewswire/ -- S&P Dow Jones Indices ("S&P DJI") conducted a consultation with market participants on potential changes to the S&P U.S. Indices Methodology and Dow Jones U.S. Total Stock Market Indices Methodology (collectively, the "Relevant Index Families") related to MegaCap companies.
The Index Committee appreciates the market engagement received in connection with this consultation and thanks all respondents for their feedback.<br>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.<br>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.<br>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.<br>S&P 500, S&P MidCap 400, and S&P SmallCap 600 Results:<br>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.<br>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 U.S. equity market.<br>The table below summarizes the consultation results.<br>Proposed<br>Methodology<br>Changes<br>Current<br>Result<br>IPO Seasoning<br>Period to be<br>reduced to six<br>months from 12<br>months<br>Initial public offerings should be traded on an<br>eligible exchange for at least 12 months before<br>being considered for addition to an index.
Spin-offs or in-specie distributions from existing<br>constituents are not required to have 12 months of<br>trading prior to their inclusion in the S&P<br>Composite 1500.
Companies that migrate from an ineligible<br>exchange, emerge from bankruptcy, are newly<br>designated to be domiciled in the U.S. for index<br>purposes by S&P Dow Jones Indices, or convert<br>from an ineligible share or organizational type to an<br>eligible type do not need to trade on an eligible<br>U.S. exchange for 12 months before being<br>considered for addition.<br>No Change<br>Investable<br>Weight Factor<br>(IWF) minimum<br>is waived for<br>MegaCap<br>companies<br>To be eligible for addition, a stock must have an<br>IWF of at least 0.10.
Companies passing the total company level market<br>capitalization criteria are also required to<br>have a security level float-adjusted market<br>capitalization (FMC) that is at least 50% of the<br>respective index's total company level minimum<br>market capitalization threshold.<br>No Change<br>Financial<br>Viability<br>exception for<br>MegaCap<br>companies<br>S&P Composite 1500. Generally Accepted<br>Accounting Principles (GAAP) net income from<br>continuing operations must be positive for:<br>o the most recent quarter, and<br>o the sum of the most recent four consecutive<br>quarters
Rule Exceptions. Exceptions to the above criteria<br>include:<br>• Migrations from one S&P Composite 1500 index<br>to another do not need to meet the financial<br>viability, liquidity, or 50% of the respective<br>index's total company level minimum market<br>capitalization threshold criteria.
• Companies that are spun-off from current S&P<br>Composite 1500 constituents do not need to<br>meet the outside addition criteria
• Non-S&P Composite 1500 companies that<br>acquire S&P Composite 1500 index<br>constituents, but do not fully...