Dow Jones U.S. Select Dividend Index Consultation

CONSULTATION

Dow Jones U.S. Select Dividend Index Consultation

NEW YORK, OCTOBER 18, 2017: S&P Dow Jones Indices ("S&P DJI") is conducting a consultation with members of the investment community on potential changes to the Dow Jones U.S. Select Dividend Index. S&P DJI is considering changes to the constituent weighting scheme, market capitalization requirement, and liquidity requirement.

CONSTITUENT WEIGHTING SCHEME

Currently, constituent weightings are assigned based on indicated annual dividend, subject to an individual company cap of 10%. S&P DJI is proposing to revise the weight capping method in an effort to reduce component concentration and/or ease liquidity limitations. S&P DJI is considering two options for this:

1. Market Capitalization Multiple Capping. Under this option, a constituent's weight would be restricted to the lower of a specified percentage or a multiple of its float-adjusted market capitalization weight relative to the sum of the float-adjusted market capitalizations of all index constituents. S&P DJI is proposing that weights, based on indicated annual dividend, be restricted at the annual rebalancing to the lower of 10% or five times a constituent's floatadjusted market capitalization divided by the sum of the float-adjusted market capitalizations of all index constituents.

2. Basket Liquidity Capping. Under this option, a constituent's weight would be restricted to the lower of 10% or the minimum initial portfolio size that can be turned over in a single day based on a specified portfolio value. S&P DJI is proposing that weights, based on indicated annual dividend, be restricted at the annual rebalancing to the lower of 10% or the constituent's threemonth average daily value traded divided by US$ 2 billion.

In addition to revising the weight capping method, S&P DJI is considering the following weighting scheme changes, which could be considered in conjunction with the weight capping proposals described above.

? Yield Weighting. In an effort to align the index with the other indices in the Dow Jones Select Dividend Index family, S&P DJI is proposing that constituent weightings be assigned based on indicated annual dividend yield rather than indicated annual dividend.

? Sector Capping. In an effort to ensure future diversification, S&P DJI is proposing that each Global Industry Classification Standard (GICS?) sector weight be restricted at the annual rebalancing to 30%. Currently, no sector has a weight exceeding 30%.

MARKET CAPITALIZATION REQUIREMENT

Currently, a stock must have a float-adjusted market capitalization of at least US$ 1 billion to be eligible for addition to the index. Current constituents must have a float-adjusted market capitalization of at least US$ 750 million to remain eligible.

S&P DJI is proposing to revise the market capitalization requirement due to the observation of the above mentioned component concentration and liquidity limitations of index components. S&P DJI is

considering increasing the minimum float-adjusted market capitalization threshold and current constituent buffer to US$ 3 billion and US$ 2 billion, respectively.

LIQUIDITY REQUIREMENT

Currently, a stock must have a three-month average daily trading volume of 200,000 shares to be eligible for addition to the index. Current constituents must have a three-month average daily trading volume of 100,000 shares to remain eligible.

S&P DJI is proposing to revise the liquidity requirement due to the observation of the above mentioned component concentration and liquidity limitations of index components. S&P DJI is considering three options for this:

1. Increase the minimum three-month average daily trading volume threshold and current component buffer.

2. Change to a minimum three-month average daily value traded and current component buffer.

3. Eliminate the liquidity requirement.

IMPACT ANALYSIS

The following table shows the impact that the proposed weighting scheme changes would have had, based on the March 2017 annual rebalancing data:

Scenario Actual Yield Weighted IAD Weighted with 5 times FMC Weight Max IAD Weighted with 10 times FMC Weight Max Yield Weighted with 5 times FMC Weight Max Yield Weighted with 10 times FMC Weight Max IAD Weighted with Basket Liquidity Capping Yield Weighted with Basket Liquidity Capping

Turnover 11.50% 30.39% 15.24% 12.32% 26.57% 28.41% 12.02% 29.18%

Post-Rebalancing Yield 3.72% 4.01% 3.62% 3.64% 3.76% 3.87% 3.68% 3.93%

QUESTIONS:

1. Do you agree with the proposal to change the weight capping method? If so, do you prefer option 1 or 2?

1a. Do you agree with the proposal to change the constituent weighting scheme from one based on indicated annual dividend to one based on indicated annual dividend yield?

1b. Do you agree with the proposal to introduce sector capping at the annual rebalancing? If so, is a sector cap of 30% appropriate?

2. Do you agree with the proposal to revise the market capitalization requirement by increasing the minimum float-adjusted market capitalization threshold and current component buffer to US$ 3 billion and US$ 2 billion, respectively?

3. Do you agree with the proposal to revise the liquidity requirement? If so, do you prefer option 1, 2, or 3?

4. Do you have any other comments or feedback regarding the proposed changes outlined above?

CONSULTATION

Your participation in this consultation is important as we gather information from various market participants in order to properly evaluate your views and preferences. Consultation responses will be made available upon request.1 If you wish for your feedback to remain confidential, please specify that in your response. Please respond to this survey by November 30, 2017. After this date, S&P DJI will no longer accept survey responses. Prior to the Index Committee's final review, S&P DJI will consider the issues and may request clarifications from respondents as part of that review. Alternative options to the proposed questions after the deadline require that the consultation be re-opened to the public. To participate in this consultation, please respond to S&P DJI at index_services@. Please be advised that all comments from this consultation will be reviewed and considered before a final decision is made; however, S&P DJI makes no guarantees or is under any obligation to comply with any of the responses. The survey may result in no changes or outcome of any kind. If S&P DJI decides to change the index methodology, an announcement will be posted on our website. Thank you for taking the time to complete this survey. For more information about S&P Dow Jones Indices, please visit .

ABOUT S&P DOW JONES INDICES S&P Dow Jones Indices is the largest global resource for essential index-based concepts, data and research, and home to iconic financial market indicators, such as the S&P 500? and the Dow Jones Industrial Average?. More assets are invested in products based on our indices than products based on indices from any other provider in the world. Since Charles Dow invented the first index in 1884, S&P DJI has become home to over 1,000,000 indices across the spectrum of asset classes that have helped define the way investors measure and trade the markets. S&P Dow Jones Indices is a division of S&P Global (NYSE: SPGI), which provides essential intelligence for individuals, companies and governments to make decisions with confidence. For more information, visit . FOR MORE INFORMATION: S&P Dow Jones Indices index_services@

1 Individual and company names as well as contact details will be redacted.

CONSULTATION

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