MSCI Adopts New Criteria For Index Exclusions
MSCI is updating its index methodology to exclude non-operating companies based on financial performance ratios.
Updated on Oct. 16, 2026 in Investing
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MSCI has adopted a new methodology that targets non-operating companies for removal from its Global Investable Market Indexes. The policy shift aims to maintain index standards by identifying corporate issuers that function similarly to investment funds.
Why it matters
The change follows an August 2026 consultation intended to refine the classification of firms that do not meet standard operating criteria. This move ensures index constituents align with operational expectations rather than resembling asset treasury companies.
MSCI will exclude companies that fail at least 4 out of 5 non-industry-specific financial ratios, including expense and operating asset intensity. Strategy saw its stock price drop over 1% to $149 in overnight trading following the news.
The players
MSCI
MSCI is a global provider of investment decision support tools, including stock market indexes used by institutional investors.
Strategy
Strategy is a publicly traded firm identified in an MSCI simulation as potentially facing index exclusion.
Metaplanet
Metaplanet is a company identified alongside Strategy as potentially facing removal from the MSCI index.
The details
Under the new framework, companies are screened against five metrics, with failure on four or more resulting in exclusion. The policy applies to entities that have failed these screens across two consecutive annual filings, and a simulation identified firms such as Strategy, Metaplanet, Bitmine, Upexi, Cypherpunk Technologies, and DeFi Development as potentially affected.
Timeline
MSCI launched a consultation regarding these changes in August 2026.
The final list of companies facing exclusion is set for release on November 11, 2026.
The new methodology will take effect following the November 2026 index review.
Market Dynamics
This policy update reflects a broader shift to standardize index composition as more companies adopt digital asset treasury models. It aligns the MSCI Global Investable Market Indexes with long-term macroeconomic standards for equity-focused investment vehicles.
Retail and institutional investors holding tracking products may see rebalancing activity as companies are removed from the indexes. Investors should monitor the November 11 announcement to identify if any assets in their portfolios face potential divestment by index funds.
The takeaway
Investors should scrutinize companies that exhibit high asset or expense intensity relative to their operating revenue to avoid unexpected index-related volatility. These changes highlight a tightening of institutional standards regarding what qualifies as an operating business in global equity markets.
What happens next
MSCI will publish the final list of companies scheduled for exclusion on November 11, 2026, followed by the full index review in November 2026.
Further reading
For more on how index changes affect portfolio composition, see our Investing section.
Live Poll
Should index providers exclude companies that hold significant amounts of non-operating assets like Bitcoin?
