S&P Dow Jones Indices will not remove any Russian stocks from its indexes at this time as a result of recent sanctions on some Russian securities imposed by the Department of Treasury’s Office of Foreign Assets Control, said David Blitzer, managing director and chairman of the index committee.
The firm had reached out on July 31 to all index fund managers licensing its indexes to discuss the implications of sanctions on the issuance of new equity securities by some Russian companies, imposed earlier in the month and effective on Aug. 1.
Mr. Blitzer said in a telephone interview that following extensive research and discussions with clients and attorneys, Russian laws and regulations provide enough advance notice of new equity issuance to allow for normal index adjustments.
“On top of the understanding of the relevant rules, the comments we got back from our clients all essentially said, ‘Don’t pull all of these stocks out of the indices overnight’, and the ones that commented on the rules came to the same conclusion we did, that we were better on a wait-and-see basis,” Mr. Blitzer said.
The sanctions against Russia came as a result of a directive of President Barack Obama to tighten pressure on the country in connection with separatist violence in Ukraine and the July downing of the Malaysian Boeing 777 jetliner killing 298 people on board.