S&P Dow Jones receives Wells notice from SEC

"The Staff's recommendation may involve a civil injunctive action, a cease and desist proceeding, disgorgement, pre-judgment interest and civil money penalties." A Wells notice does not necessarily mean the SEC will bring any action against the company or that the recipient has violated any law.

S&P Dow Jones Indices, one of the largest index providers for exchange-traded funds, has received a Wells notice from the U.S. Securities and Exchange Commission (SEC), a filing by New York-based financial-data agency S&P Global showed.

The Wells notice was issued to the index provider for failing to provide sufficient disclosures on some volatility-related indexes in 2018, according to the filing https://www.sec.gov/ix?doc=/Archives/edgar/data/64040/000006404020000144/spgi-20200630.htm from Tuesday. The SEC is planning to file an enforcement action against the index provider, a joint venture between S&P Global and exchange operator CME Group, the filing said.

"The proposed action would allege violations of federal securities laws with respect to the absence of disclosure of a quality assurance mechanism and the impact of that mechanism on certain volatility related index values published on one business day in 2018," S&P Global said in the filing. "The Staff's recommendation may involve a civil injunctive action, a cease and desist proceeding, disgorgement, pre-judgment interest and civil money penalties."

A Wells notice does not necessarily mean the SEC will bring any action against the company or that the recipient has violated any law. "S&P Dow Jones Indices has established rigorous processes to maintain the transparency and integrity of our benchmark determination process, and protect the independent governance and quality of our indices," an S&P spokeswoman said in an email.