MSCI Adopts a Non-Operating Screen That Could Drop Strategy in November

MSCI will apply a new eligibility test for what it calls non-operating companies from its November index review, the index provider said on Thursday. Companies that fail it fall out of the MSCI Global Investable Market Indexes, the benchmark family much passive money tracks. Digital-asset treasury firms are the group most exposed, because the test opens by asking whether a company holds substantial operating assets. The final list of affected names is published on 11 November, and changes take effect at the close on 30 November. Strategy has argued against the plan since August.

Two steps, and four flags out of five

The screen runs in two parts. A company is assessed first on its operating assets, and one that fails that check is then measured against five financial ratios; a company flagged on at least four of the five is ineligible. Cointelegraph, crypto.news and ChainCatcher describe the four-of-five rule in the same terms, and none reproduces the ratios or their thresholds. TFTC published candidate names and numbers in August from the consultation document, and said it could not establish whether each threshold marked a pass or a fail.

Being removed takes longer than being kept out. An existing constituent goes only after failing the screen in both of its two most recent annual filing periods, while a company outside the index is barred from joining if it fails in either one, and MSCI may use the latest interim filing as well. Buffers apply to the ratio thresholds and to the timing, which MSCI says is meant to hold down turnover. The interim restrictions from October 2025, which caught firms whose digital assets were at least half of total assets, are discontinued; those companies now sit under the new test.

Three outlets, three lists

Who actually goes is unsettled. The Block names Strategy and Metaplanet alongside Yellow Cake, a UK uranium investment company, from MSCI's May simulation, and says the rules could catch the ether treasury firm SharpLink too. Cointelegraph has Strategy slated for deletion, Metaplanet and Upexi at risk, and a watchlist of SharpLink, Ton Strategy Company, Solana Company and DeFi Development Corp. crypto.news gives a third watchlist: SharpLink, Taiwan's Center Laboratories and Turkey's Lydia Holding. The three accounts overlap on three names and do not reconcile. crypto.news adds that MSCI has not confirmed the May simulation will match November's list.

Strategy's own number is 3.1%

Strategy asked MSCI to drop the idea during the consultation, which ran from 3 August to 30 September.

"We ask MSCI to withdraw its proposal," Strategy wrote in the response it published, dated 31 August.

Its case rests on how little index money it says is involved. Funds tracking the GIMI indexes hold about 13 million of its shares, 3.1% of basic shares outstanding, which the company puts at 60% of MSTR's 30-day average daily volume. The response also says the bitcoin business is reported as an operating segment under US GAAP, consistent with discussions with SEC staff, and calls the proposal a pretext for targeting digital asset treasury companies. Michael Saylor and chief executive Phong Le called the plan discriminatory earlier this year.

The estimate everyone quotes is older than the rule

A figure of $2.8 billion in forced selling is attached to a Strategy exclusion in several accounts. Cointelegraph carries it and says plainly that JPMorgan made the estimate against MSCI's earlier digital-asset proposal, not the rules adopted on Thursday. ChainCatcher carries the same number with no such qualification. The two framings do not reconcile. MSCI dropped the older proposal in January, deciding against excluding treasury companies outright and opening this wider consultation instead. TFTC's own estimate for Strategy under the new screen, $1.8bn to $2.0bn, appears in one outlet only.

November settles the part that matters. The list lands on the 11th and any deletions bite at the close on the 30th, leaving index funds nineteen days. Whether other providers follow has no answer yet. TFTC sketched a scenario in which FTSE Russell and S&P Dow Jones do the same, and said neither has announced a consultation.