MARKET CONSULTATION ON THE METHODOLOGY CHANGE OF UBS LGBT EMPLOYMENT EQUALITY INDEX | MAY 2019
Solactive AG has decided to conduct a Market Consultation for an alteration of the rules governing the index review and adjustment of the indices listed below.
|NAME||INDEX RIC||INDEX ISIN|
|UBS LGBT Employment Equality Index||.UBSLGBTP||DE000SLA4Z34|
|UBS LGBT Employment Equality Index TR||.UBSLGBTT||DE000SLA4Z42|
Rationale for Market Consultation
The affected indices listed below are designed to track the price movements of US companies with workplaces that provide LGBT equality through their company and employment policies.
In order to determine LGBT equality, the constituent selection relies on data published in the Human Rights Campaign Foundation’s Corporate Equality Index (“HRC CEI”), which is published on an annual basis and available through the website of the Human Rights Campaign Foundation (www.hrc.org).
In the current setup the affected indices are fully reconstituted annually in January based on the latest HRC CEI. Additionally, index constituents can be removed from the indices on a quarterly basis if the HRC publishes a revised score for a company that is below 85. Solactive AG has determined that this setup might lead to situations where the annual reconstitution in January takes place before the latest annual HRC CEI is published. With the next reconstitution following only one year later, the affected indices might reflect outdated data for a period of one year, potentially leaving out companies that have achieved a sufficient rating in the latest HRC CEI.
Therefore, Solactive proposes to alter the methodology in a way that takes into account the publication date of the latest annual HRC CEI. The indices would be reviewed on a quarterly basis, with a full reconstitution if a new annual HRC CEI has been published since the last quarterly review. If no new annual HRC CEI has been published since the last quarterly index review, the affected indices would keep the current practice of only removing companies if the HRC publishes a revised score for a company that is below 85.
More details can be found in the document attached to this consultation. Please respond until 3rd of June, 2019.