MSCI, INC. Following feedback from investment community, MSCI will exclude securities from the MSCI Global Investable Market Indexes (GIMI) for which the Hong Kong Securities and Futures Commission (SFC) has issued high shareholding concentration notices starting from the February 2016 Quarterly Index Review (QIR).
Companies included on the SFC high shareholding concentration notices will continue to be ineligible for inclusion in the MSCI GIMI until sufficient public disclosure is made by such companies confirming an increase in free float resulting in a Foreign Inclusion Factor equal to or larger than 0.15, following the SFC high shareholding concentration notice. As the current stipulated shareholding disclosure requirements in Hong Kong may be insufficient to conclude whether high shareholding concentration is no longer present, MSCI would review, if made publicly available, all voluntary disclosure of a more granular shareholder structure by such companies.
The full list of current constituents of the MSCI GIMI impacted by this methodology change is available on MSCI website, http://www.msci.com/products/indexes/consultations/. These securities will be deleted from the relevant country indexes coinciding with the February 2016 QIR, unless sufficient public disclosure is made available by the company five business days before the effective date of the February 2016 QIR. In such instance, MSCI would review eligibility of such company in order to mitigate potential reverse turnover.
MSCI would continue reviewing the free float of companies previously included on the SFC high shareholding concentration notices as stipulated in the MSCI GIMI and the MSCI Corporate Events methodologies. Securities deleted as a result of inclusion on the SFC high shareholding concentration notice will only be considered for index re-inclusion 12 months after sufficient public disclosure becomes available that confirms that high shareholding concentration is no longer present.
Any constituents of the MSCI GIMI for which the SFC issues the high shareholding notice after the February 2016 QIR would be deleted as part of the subsequent index review.
The updated MSCI GIMI methodology book will be provided as part of the February 2016 QIR.
-Ends-
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MSCI Inc. issued this content on 01 February 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 01 February 2016 09:22:22 UTC
Original Document: https://www.msci.com/documents/10199/686384bd-6b0d-45ab-afd1-ca3ff96ec441
