MSCI Introduces Index Exclusion Rules That Could Remove Strategy

MSCI has moved to tighten the rules governing which companies can remain in its flagship global benchmarks, adopting a methodology that could remove “non-operating companies” from the MSCI Global Investable Market Indexes. The change raises the risk of forced selling for certain crypto-linked treasury firms—most notably Strategy, along with other entities that MSCI has flagged for closer review.

Under the new framework announced Thursday, MSCI will evaluate firms using operating asset metrics and five financial ratios. Companies that fail the criteria could become ineligible, with removal potentially triggered after additional annual reporting periods. MSCI says the final affected list will be released on Nov. 11, taking effect Nov. 30, 2026.

Key takeaways

• MSCI is adopting a “non-operating companies” screening methodology for its Global Investable Market Indexes, which could change benchmark constituents for certain crypto treasury firms.


• MSCI will assess operating assets and five financial ratios; companies failing at least four tests could be deemed ineligible.


• Removal is scheduled to take effect Nov. 30, 2026, after a multi-period screening window for current constituents.


• At least five crypto-related treasury companies were identified as being at risk—some for immediate removal and others placed on a potential watchlist.


• If benchmark-linked funds must rebalance, index tracking demand could shift away from affected stocks, potentially increasing sell pressure.

What MSCI is changing in its benchmark rules

MSCI said it will adopt a methodology originally proposed in August aimed at excluding “non-operating companies” from the MSCI Global Investable Market Indexes. The core of the approach is a quantitative assessment designed to determine whether a company’s profile aligns with MSCI’s index eligibility standards.

According to MSCI, the evaluation will be based on operating assets plus five financial ratios. If a company fails at least four of those five tests, it could be considered ineligible for inclusion.

For companies already in the index, MSCI generally requires the screening failures to persist over two annual reporting periods before removal—meaning immediate deletion is not automatically guaranteed for every flagged firm. That said, the existence of a formal process and a defined effective date still increases planning pressure for investors and passive fund managers.

Which crypto treasury firms face potential exclusion

In its earlier identification under the “non-operating companies” approach, MSCI singled out Strategy as a likely candidate for deletion from its indexes. MSCI also referenced other crypto treasury-related companies that could be reviewed more closely.

Among the firms mentioned in Thursday’s update were Sharplink, Inc (SBET), Ton Strategy Company (TONX), Solana Company (HSDT), and DeFi Development Corp. (DFDV). MSCI placed these entities on a watchlist for potential removal rather than stating outright they will be deleted.

The distinction matters. A watchlist status may mean the companies still have a window to meet the eligibility criteria or, at minimum, face a delayed decision. But because the screening is anchored to operating assets and financial ratios, investors should treat a watchlist as a credible risk—not a theoretical one—especially with the scheduled final determination date.

Why index exclusion can matter for liquidity and stock demand

Index-linked products and passive strategies can concentrate buying and selling around benchmark changes. When a company is removed from an index, funds that track those benchmarks are typically expected to rebalance—often by selling the excluded constituents.

This is the practical concern at the center of MSCI’s update: removal can translate into a predictable wave of supply as benchmark trackers adjust portfolios. That can increase volatility and reduce incremental demand from passive investors, particularly if the change arrives during periods of already-thin liquidity.

The potential magnitude depends on how many shares index funds hold and how quickly they are required to exit. Still, the structural mechanism is straightforward: if MSCI constituents change, benchmark-linked flows follow.

Earlier commentary has highlighted how broad-based index exclusion affects investors who did not actively choose to remove specific holdings. Conner Brown, executive director of the Bitcoin Policy Institute, noted in September that the consequences of exclusion extend to “tens of millions of people” through default index portfolios, using Strategy as an example of what could be removed by such a process.

Timetable: final list and effective date set for late 2026

MSCI says the final list of companies that will be removed will be released on Nov. 11. The removals will take effect on Nov. 30, 2026, giving market participants advance notice to model the costs of potential rebalancing.

MSCI’s description also emphasizes that current index members must generally fail the screening process over two annual reporting periods before removal. That structure suggests MSCI is aiming to reduce one-off or temporary classification issues, but it also means the eligibility question can linger for firms already known to be at the center of the rule change.

For investors, this timeline creates a clear window for monitoring: as companies report, traders and passive managers will look for signs of whether the operating assets and financial ratios used in the screening are moving toward compliance—or staying out of bounds.

In August, Strategy opposed the change when MSCI proposed the approach, while also describing what it viewed as limited disruption risk. The company said funds tracking MSCI’s Global Investable Market Indexes hold about 13 million shares, representing roughly 3.1% of its basic shares outstanding, and argued the holdings amounted to less than a day’s trading volume.

Separately, JPMorgan analysts had previously estimated that exclusion could trigger about $2.8 billion in selling, though that figure was linked to MSCI’s earlier digital asset-related proposal rather than the exact rules adopted Thursday. The difference underlines a key point for readers: estimated sell-side impacts are sensitive to the specific methodology being implemented.

As the Nov. 11 final list approaches, investors should watch how MSCI’s screening criteria evolve in practice, especially whether watchlisted companies move closer to or further from eligibility. The uncertainty isn’t only whether removal will happen, but how strongly benchmark-driven selling pressure is likely to materialize once passive funds are forced to rebalance under the new MSCI framework.

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