MSCI Adopts Rules That Could Threaten Strategy’s Index Inclusion; Final List Due November 11
Key Facts
MSCI adopted new eligibility rules on October 15 that could put Strategy among the companies at risk of removal from its global indexes. It will publish the final list on November 11, with the changes taking effect at the close on November 30. This means a potential exclusion has not yet been decided, even though the issue has moved from consultation to adopted rules. Strategy was included in the MSCI USA and MSCI World indexes, according to a Reuters report, which noted that passive funds and investors tracking the indexes are required to hold shares in their constituents. The final decision could therefore affect demand linked to those indexes, but the scale will depend on which companies appear on the final list. EL7 data show the company’s stock closed at $141.62 on October 29.
MSCI has placed Strategy and Japan’s Metaplanet on a potential deletion list, Reuters reported, while SharpLink and a number of other digital asset treasury companies are on a watch list for possible removal. The new rules target companies that MSCI’s tests do not classify as operating companies, and broaden the existing exclusion to include institutional issuers that quantitative tests find have similar characteristics. Investment funds, business development companies and passive investment vehicles were already excluded from the indexes, according to MSCI’s announcement. MSCI said the change expands the exclusion of passive investment vehicles and requires companies to pass financial tests related to their operating assets to remain eligible. The assessment is therefore tied to the nature of a company’s assets and the test results, rather than merely to its declared ownership of digital assets.
The methodology begins with an initial screen of operating assets, then applies five financial ratios as part of the exclusion test. A security becomes ineligible if it is flagged on four or more ratios, according to MSCI: "A security will be ineligible for index inclusion if it is flagged on four or more of the five ratios." But the rule includes protection for companies already in the indexes: an existing constituent will be removed only if it fails the ineligibility test in both of the two most recent annual reporting periods. MSCI says a current constituent will be removed only if it fails in both periods. Requiring two periods means a result from a single period is not enough on its own to remove an existing constituent, while the forthcoming final list will show which companies are affected in this review.
The review follows a discussion MSCI began about digital asset treasury companies. A year ago, it proposed excluding them as similar to investment funds, then postponed the plan in January and opened a broader review of non-operating companies, Reuters reported. MSCI launched its rule consultation on August 3, 2026, inviting market participants to submit feedback through September 30. After the consultation ended, it announced the rules’ adoption on October 15 and set the close on November 30 as the effective date for changes from the November review. These stages mark a shift from a specific proposal concerning digital asset treasury companies to a broader test covering institutional issuers with similar characteristics. MSCI will publish the final list of affected companies in its index review announcement on November 11.
The risk of exclusion matters for Strategy because its business model relies on raising capital to buy Bitcoin through equity and debt sales, according to Reuters. The company said its additional net proceeds from sales under its stock issuance program totaled about $58.7 million between October 1 and 23, 2026. In its financial results announcement on October 29, it said it held 848,517 Bitcoin as of October 25 and had raised $21.23 billion in capital since the start of the year. These figures link the company’s ongoing capital raising to the size of its digital currency holdings, while MSCI’s new test is based on operating assets and financial ratios. The company’s market capitalization was about $64.3 billion on October 16, according to Reuters, while its stock was down 4.8% year to date through that date.
Strategy had previously warned of the potential impact of exclusion, saying last year that removal from the indexes would trigger the liquidation of $2.8 billion in shares and negatively affect the sector. After MSCI announced on October 15 that it had adopted the rules, the company’s stock fell 4.2% in the Friday, October 16 session, according to Reuters. The stock was a constituent of the MSCI USA and MSCI World indexes when the report was published. The move offers an indication of the market’s response to the announcement, but it came before the final list was set and does not establish that Strategy will be removed. The decision is due on November 11, while the changes take effect at the close on November 30.