On Monday, August 24, S&P Dow Jones Indices (S&P DJI), the American financial index provider, proposed a significant change in its eligibility criteria for the composite Pan-Arab indices. This change involves moving away from a general eligibility framework to a specific list of recognized markets, which explicitly includes the Casablanca Stock Exchange. The first application of these new criteria could occur during the rebalancing scheduled for December 21, 2026, as part of the methodological consultation reopened by S&P DJI.
The proposed framework assigns a clear role to the Moroccan market within the updated rules for the S&P Pan Arab Composite and its related indices. Previously, the methodology allowed all stock exchanges to qualify; however, S&P DJI now suggests that securities included in this index family must be listed on one of twelve designated exchanges, which are: Cairo, Kuwait, Doha, Tadawul in Saudi Arabia, Abu Dhabi, Dubai Financial Market, Nasdaq Dubai, Bahrain, Amman, Casablanca, Muscat, and Tunis.
It is essential to note that this development does not signify a reclassification of the Moroccan market or a new entry of the kingdom into the pan-Arab landscape of S&P. Morocco is already classified as a frontier market by S&P DJI, alongside Bahrain, Oman, Jordan, and Tunisia. In contrast, countries like Egypt, Qatar, the United Arab Emirates, Saudi Arabia, and Kuwait are categorized as emerging markets.
S&P DJI had initially closed a consultation on August 10 but reopened it until September 18 to gather additional feedback. The provider justifies these proposed changes as part of its efforts to enhance the liquidity of the indices, improve the execution of rebalancing, and align the calculation schedule and construction rules more closely with the needs of regional users.
Casablanca Included Among Twelve Exchanges
The alteration concerning Casablanca primarily involves shifting from a general principle of eligibility to a defined list of recognized exchanges. For composite and national indices, S&P DJI proposes that a stock must be listed on an exchange located in its country of domicile. In the case of the S&P Pan Arab Composite and its derivates, securities should be listed on one of the twelve specifically enumerated exchanges.
Thus, for the purposes of this methodology, the Casablanca Stock Exchange will be placed on the same eligibility list as the major Arab exchanges recognized by S&P DJI. This framework also incorporates the Egyptian Stock Exchange, Bursa Kuwait, Doha Market, Tadawul, Abu Dhabi Securities Market, Dubai Financial Market, Nasdaq Dubai, Bahrain Bourse, Amman Stock Exchange, Muscat Stock Exchange, and the Tunis Stock Exchange.
However, the implications of this reform vary depending on the index families. S&P DJI clarifies that the changes regarding exchange eligibility and exchange rate measurements will only apply to Domestic and Composite indices. The Investable indices, aimed at international investors and linked to the S&P Global BMI or S&P Frontier BMI series, will maintain their existing rules for these two areas.
Upcoming Deadlines and Consultation Period
The reform also affects the calculation schedule of the Pan-Arab indices. Currently, these indices are calculated six days a week, from Sunday to Friday, without a holiday calendar. S&P DJI proposes to maintain this frequency unless all exchanges within the Pan-Arab universe are closed. This change would apply to all S&P Pan Arab indices.
Moreover, the rebalancing schedule would be revised. The S&P Global BMI and S&P Frontier BMI indices will continue to be restructured annually on a country-by-country basis, with a reference date set at the end of July for emerging markets and at the end of January for frontier markets. For markets where Sunday is a trading day, the rebalancing of composite and national indices would take effect before the opening on the Sunday following the third Friday of the rebalancing month.
If these proposals are adopted, S&P DJI anticipates implementing the new rules regarding calculation days, holiday schedules, and exchange rates before the market opens on Monday, November 2, 2026. The modifications concerning the rebalancing schedule and exchange eligibility will come into effect during the next rebalancing, prior to opening on Monday, December 21, after a preliminary appearance in provisional files for clients starting Friday, December 4.
Market participants have until September 18 to express their views on each of the proposed modifications and their timelines. S&P DJI emphasizes that it will review all responses before making its final decision, and the consultation may not lead to any changes; any revisions ultimately adopted will require prior announcement before they take effect.
As reported by barlamane.com.
