MSCI Rules Put Strategy at Risk of Index Exclusion

MSCI has adopted new index eligibility rules that could put Strategy and other companies with investment-heavy balance sheets at risk of exclusion, though no final removal decisions have been made. MSCI is scheduled to publish the list of potentially affected companies on November 11, with any index changes taking effect after the November 30, 2026, market close. The methodology first assesses whether a company has substantial operating assets. Companies that fail that screen will face five financial tests; triggering at least four makes them ineligible. Existing index constituents must fail the screening in both of their two most recent annual filing periods before removal. MSCI may also consider the latest interim filing when available. The rules replace temporary restrictions aimed at companies whose digital assets accounted for at least half of total assets. The new approach focuses on whether a company’s financial characteristics resemble those of an investment vehicle rather than an operating business. An earlier MSCI simulation using historical financial data identified Strategy, Japan’s Metaplanet and British uranium investment company Yellow Cake as possible...