- S&P Dow Jones Indices LLC, part of S&P Global (NYSE:SPGI -0.7%), agrees to settle a U.S. Securities and Exchange Commission investigation into alleged failures, which led to the company publishing old index values for the S&P 500 VIX Short Term Futures Index ER.
- S&P DJI agrees to a cease-and-desist order without admitting or denying the SEC's findings, and agrees to pay a $9M penalty, the SEC said. S&P Global said the matter resolves a previously disclosed Wells Notice.
- According to the order, the SEC found that on Monday, Feb. 5, 2018, when CBOE Volatility Index futures contracts spiked 115%, the S&P 500 VIX Short-term Futures Index remained unchanged during certain intervals between 4:00 PM and 5:08 PM that day.
- That occurred due to an undisclosed "Auto Hold" feature, that triggered if an index value breaches certain thresholds.
- As a result that undisclosed practice affected securities issuers that license the index, including the issuer of the inverse exchange-traded note called XIV.
- The "Auto Hold" led to the publication and distribution of stale and static index values, which, in turn, led to the XIV's reported indicative real-time values being higher than they would have been had Auto Hold not been triggered, the SEC said.
- S&P DJI said it continues to enhance and strengthen its control framework and operations.