MSCI to Conclude on Strategy's Inclusion in October

Strategy ($MSTR) has opposed MSCI's classification of non-operating companies, reigniting the debate over the index inclusion criteria for publicly traded companies holding Bitcoin (BTC). The key issue is whether companies with significant Bitcoin holdings should be considered operating companies or classified as asset-holding entities.

In a consultation document released in August 2026, MSCI proposed new criteria that could exclude non-operating companies from the MSCI Global Investable Market Index. The deadline for submitting opinions is September 30, and the results of the consultation are expected to be announced on or before October 16. If the changes are confirmed, they will be reflected in the regular index review in November 2026.

The proposal has a two-step structure. First, it assesses whether the company's operating assets exceed 50% of total assets. If this condition is not met, five additional criteria are applied: operating asset intensity, cost intensity, cash flow, fair value changes, and capital dependence. If a company fails to meet four or more of these criteria, it will be classified as ineligible for index inclusion.

MSCI has stated that it will implement a buffer for existing constituents. Companies currently in the index will not be removed immediately for failing to meet the criteria; they must fail to meet the criteria for two consecutive assessments to be removed. MSCI explained that this approach is designed to reduce index volatility.

In a simulation based on data from May 2026, Strategy, Metaplanet (3350), and Yellow Cake plc were identified as potential removals. Sharplink Gaming ($SBET), Center Laboratories, and Lydia Holding were placed on a watchlist.

Strategy has countered that the new criteria are "discriminatory, arbitrary, and incorrect." The company stated in its 10-Q filing as of June 30, 2026, that it classified its Bitcoin financial activities as a separate reporting operating segment starting in the second quarter. This segment is responsible for Bitcoin acquisition and holding, capital market financing, and capital management strategies.

On August 31, 2026, Strategy disclosed in an 8-K filing that it had purchased an additional 4,603 Bitcoins. This indicates that the company presents its Bitcoin holdings not merely as an investment asset but as part of a separate operating segment. However, the company's accounting classification does not necessarily lead to the same conclusions as MSCI's index inclusion criteria.

The discussion around non-operating companies is not new. MSCI previously considered excluding digital asset financial companies in 2025. Subsequently, on January 6, 2026, it decided not to implement that plan immediately but indicated a broader review of non-operating companies. The current proposal targets non-operating companies in general rather than specific digital asset-holding firms.

Digital asset financial companies typically refer to publicly traded firms that hold large amounts of digital assets like Bitcoin as financial assets. These companies often accumulate assets through securities issuance and capital market financing rather than operational cash flow. Index providers question whether such structures can be treated within the same index as traditional operating companies.

Market concerns revolve around passive fund flows. Index-tracking funds must hold the constituent stocks in certain proportions, so removal could lead to a reduction in the base of mandatory investors. Analysts have previously estimated that if Strategy were excluded from the MSCI index, it could trigger passive selling pressure of approximately $2.8 billion (around 38.5 trillion KRW). If other indices move in the same direction, estimates suggest this could expand to $8.8 billion (around 12.1 trillion KRW), although these figures are not confirmed.

Earlier, we reported that MSCI's review of the exclusion criteria for non-operating companies had brought the issue of index inclusion for Bitcoin-holding firms to the forefront. Following this, Strategy demanded the withdrawal of MSCI's proposed changes to the non-operating company index eligibility.

For domestic investors, this issue is not merely a simple adjustment of foreign indices. Strategy has been traded as a stock intertwined with Bitcoin prices, the U.S. stock market, and index inclusion fund flows. Among domestic investors in Bitcoin-holding companies, the question of index inclusion is also a concern regarding its impact on stock demand and funding conditions.

Counterarguments exist. Strategy claims it has a software business and that Bitcoin financial activities are reported as a separate operating segment. In contrast, MSCI's proposal seeks to differentiate operating from non-operating companies based on asset composition and financial ratios. This creates a conflict between the company's business description and the classification criteria of the index provider.

Currently, no definitive decision has been made. MSCI plans to gather opinions from market participants by September 30 and announce the results of the consultation before October 16. If changes are confirmed, they will be applied starting from the regular index review in November 2026.