Methodology Change | Solactive Cornèr Family Owned Company ESG Indices | Effective Date 30/12/2022

Today, on the 16/12/2022, Solactive announces the following changes to the methodology of the following indices (the ‘Affected Indices):

Rationale for Methodology Change

Solactive has determined that the removal of US partnership shares from the affected indices to allow for investors/clients/subscribers of the indices worldwide to be able to replicate the index in the most cost-effective manner. Potential foreign clients and subscribers of the index will encounter the burden of excess taxes related to the investment in US partnership shares via the Effectively Connected Income Tax which taxes foreign businesses doing business in the United States through a branch or an entity otherwise treated as a flowthrough for U.S. tax purposes (such as US partnership units in this case). Moreover, investments in partnership shares by foreign entities will trigger a 30% branch profits tax is imposed on after-tax effectively connected earnings and profits of a foreign corporation’s U.S. trade or business that are deemed to be distributed by the branch out of the United States.

Changes to the Index Guideline

The following Methodology changes will be implemented in the following points of the Index Guideline (ordered in accordance with the numbering of the affected sections):

From:

2.1 INDEX UNIVERSE REQUIREMENTS

(…)

The Index Universe is comprised of all financial instruments which fulfill the below requirements

 (the “Index Universe Requirements“):

• Is a member of the Family Owned Companies Pool of the Solactive Global Family Owned Companies Index (ISIN: DE000SLA1AW5), as defined in the Index Guideline of the Solactive Global Family Owned Companies Index.
• Must be listed as common stock, preferred stock or American Depository Receipt [ADR].
• Family ownership stake of at least 32%

(…)

To:

2.1 INDEX UNIVERSE REQUIREMENTS

(…)

The Index Universe is comprised of all financial instruments which fulfill the below requirements

 (the “Index Universe Requirements“):

• Is a member of the Family Owned Companies Pool of the Solactive Global Family Owned Companies Index (ISIN: DE000SLA1AW5), as defined in the Index Guideline of the Solactive Global Family Owned Companies Index.
• Must be listed as common stock, preferred stock or American Depository Receipt [ADR].
• Family ownership stake of at least 32%
• Exclude securities which have security type of “partnership shares”

(…)

Defined terms used in this announcement, but not defined herein, have the meaning assigned to them in the respective index guideline of the Affected Indices. The amended version of the index guideline will be available on the effective date.