MSCI officially adopted on October 15 its rule on non-operational companies, which will exclude any firm whose primary business is holding assets without exploiting them. The filter relies on a two-step test with five financial ratios: a company is excluded if it triggers four out of five flags, including operational assets below 20% of the balance sheet, negative operating cash flows, or reliance on capital raising exceeding 20% of the balance sheet. The final list will be published on November 11 and removal will take effect at the close of November 30, forcing passive funds tracking MSCI indices to sell their positions, particularly in Strategy which holds over 440,000 BTC. JPMorgan estimated 2.8 billion dollars in forced sales for MSTR alone under MSCI’s rule, a figure that could reach 8.8 billion if FTSE Russell and S&P Dow Jones adopted similar filters.
Source: Read the original article
