MSCI to exclude non-operating companies from global indexes

MSCI has officially announced new criteria to exclude ‘non-operating companies’ from its Global Investable Market Indexes (GIMI). This decision follows a period of consultation and aims to remove companies that prioritize investment or asset holding over traditional business activities.

Under the new rules, companies must demonstrate sufficient operating assets. If they fail this check, they are evaluated against five financial metrics: the ratio of operating assets to expenses, operating cash flow, fair value fluctuations of held assets, and dependence on external funding. A company is deemed ineligible if it meets at least four of these exclusion criteria.

Existing constituents are protected by a buffer; they will only be removed if they meet the exclusion criteria for two consecutive annual reporting periods. The final list of affected companies is scheduled to be released on November 11, with the changes taking effect following the November index review.

Several companies with significant digital asset holdings, including Metaplanet in Japan and MicroStrategy in the United States, appear on the provisional list of candidates for exclusion. While the criteria are not exclusively targeting crypto-holding firms—as evidenced by the inclusion of uranium-holding company Yellow Cake—the move has impacted market sentiment for companies with high Bitcoin exposure.