MSCI adopts rules to exclude non-operating companies from global indexes in November review
Key Facts
On October 15, MSCI announced rules making non-operating companies ineligible for its investable global indexes, following minor changes to its earlier proposal. The company said the decision will be applied in the November 2026 review, concluding the consultation that began in August. The rules are not limited to digital-asset or bitcoin treasury companies; they set a general standard for classifying non-operating companies. The announcement therefore does not mean that any particular company will definitely be deleted: MSCI said the final list of affected existing companies will be published on November 11. The changes take effect at the November 30 close, according to the review schedule announced by the company.
The methodology begins with a substantive test of operating assets, then turns to five financial metrics unrelated to any specific sector if a company does not pass that test. A company becomes ineligible if it fails four or more metrics, under the rule announced by MSCI. The test gives the decision a broader framework than measuring a holding in any one asset, assessing both the nature of the company and its financial metrics. MSCI said in January that it would not implement an earlier proposal to exclude digital-asset treasury companies in the February review, and would instead open a broader consultation on non-operating companies. It said at the time that institutional investors’ concerns centered on the similarity of some of those companies to investment funds and the possibility that they belonged to a group dominated by investing rather than operating.
The treatment differs for companies already listed and those seeking inclusion in the indexes. An existing constituent will be deleted only if it fails the ineligibility test in each of the two most recent annual filing periods, MSCI said. A non-constituent, meanwhile, will not be added if it fails in either period. The repeated-failure requirement makes deletion of an existing constituent contingent on the results of both periods, while the inclusion standard allows a company to be rejected if it fails in one of them. The November review will end the temporary measures MSCI announced in October 2025 for companies whose digital-asset holdings accounted for 50% or more of total assets; those companies will be assessed under the new methodology.
MSCI previously provided a simulation of what the rules might produce, not a final list of exclusions. In a test of the MSCI ACWI IMI using May 2026 data, three companies emerged as potential deletion cases: Strategy, Yellow Cake and Metaplanet. The company also placed Center Laboratories, Lydia Holding and SharpLink on a separate watchlist. The simulation shows which companies may warrant further scrutiny under the methodology, but it does not determine the outcome of the November review. According to MSCI’s announcement, the final list of affected existing companies is due on November 11.
The decision quickly affected Strategy’s shares. The stock, whose company is the largest bitcoin holder, according to Reuters, fell 4.2% on Friday, October 16. The company was a member of the MSCI USA and MSCI World indexes when the report was published. The move offers an indication of the stock’s sensitivity to the possibility of losing demand linked to index membership, while exclusion itself remains uncertain ahead of the final list. JPMorgan estimated in November 2025 that removing Strategy from MSCI indexes could lead to $2.8 billion in outflows from its shares, rising to $8.8 billion if other indexes followed the same approach. It said active fund managers are not required to replicate index changes, but warned that exclusion could be seen as a negative signal.
The decision follows a process that began with a narrower proposal concerning digital-asset treasury companies, before MSCI broadened the consultation to non-operating companies in general. In January 2026, the company decided not to apply an exclusion of digital-asset treasury companies in the February review, then moved to establish classification rules covering operating assets and multiple financial metrics. In October 2025, it had introduced temporary measures for companies whose digital assets made up half or more of their assets; the new methodology will replace those measures in the November review. Treasury companies will therefore be assessed under the same general rules, with different timing requirements for existing constituents and non-constituents. The final list will be published on November 11, before the changes take effect at the November 30, 2026 close.