Investing August 17, 2007

S&P Clarifies its Index Definition of a US Company

August 17, 2007 (PLANSPONSOR.com) - Standard and Poor's has announced a clarification of its definition of a U.S. company for index purposes.
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In a press release, S&P said that a U.S. company, for index purposes, should have the following characteristics:

  • Incorporated in the U.S.
  • Financial reporting should be U.S. GAAP, in U.S. dollars, and the company should not be considered a foreign entity by the SEC
  • A corporate governance structure consistent with U.S. practice
  • Headquartered in the U.S.
  • The U.S. portion of revenues, operations, fixed assets and employees should be a significant portion of the total, but need not exceed 50%
  • The common stock should be listed on NYSE, Amex, NASDAQ or NYSE Arca (ADRs are not acceptable)
  • The company should generally be considered a U.S. company by analysts and investors

Nonetheless, S&P said that if one of these criteria is not met and there is no other major market in which a company would logically be assigned, S&P may deem it a U.S. company for index purposes.

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