Russia Sanctions Could Spur S&P Dow Jones Index Changes

By Dow Jones Business News, 
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Russia Sanctions Could Spur S&P Dow Jones Index Changes


By Matt Day

S&PDow Jones Indices has asked clients if it should remove sanctioned Russian firms from its closely watched financial markets indexes.

The U.S. and European Union earlier this week ramped up sanctions on Russia for what they say is its destabilizing role in Ukraine. Punitive measures announced by Washington earlier this month essentially prohibited U.S. entities from providing new equity- or long-term debt financing to a set of Russian energy and defense firms. The EU followed this week with sweeping sanctions on Russian companies and individuals, though some details on Europe's sanctions have yet to be announced.

The sanctions are likely to lock some Russian firms out of U.S. and European capital markets, but they don't explicitly prohibit trade in these firms' existing securities.

S&P asked clients a slate of questions such as whether sanctioned firms' shares should be removed from its indexes, or if a specific country adopts sanctions on a firm if the index provider should treat that firm as sanctioned in all jurisdictions.

"While S&P Dow Jones Indices believes that its indices are not directly impacted by these actions, we do recognize that some licensees may be required to divest holdings of sanctioned companies," S&P Dow Jones Indices said in a statement on Thursday.

S&P Dow Jones, a subsidiary of McGraw Hill Financial Inc., asked clients to respond to the survey, which covers dozens of the firm's indexes, by Aug. 15.

J.P. Morgan Chase & Co. said this month it won't include any new bonds issued by Russian companies subject to U.S. sanctions in its closely watched debt indexes.

Dow Jones & Co., publisher of The Wall Street Journal and Dow Jones Newswires, holds a minority stake in the indexing firm.

Write to Matt Day at matt.day@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires


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