MSCI postpones changes for Russian securities

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MSCI will not make immediate changes to indices containing Russian securities that would normally be considered as part of a February quarterly index review, it said in a statement on Friday.

Sanctions imposed by Western nations on Russia for its invasion of Ukraine led to the decision, along with feedback from market participants on the investability and replicability of the MSCI Russia indices, the statement said.

Earlier in the week leading up to Thursday’s invasion, MSCI said it would assess the impact of the sanctions and consider further steps, including freezing Russian indices or removing some Russian companies from other indices.

After further sanctions were announced by the US on Thursday, MSCI said it will give “special treatment” to Russian securities in certain stock indices and will not make any changes at least until it conducts the quarterly index review of Russian indices or affected composite indices.

The treatment applies to the MSCI Standard, Small Cap, Micro Cap, Value and Growth US Equity, US REIT, Islamic, Domestic Standard, Domestic Small Cap, Overseas China Standard and Overseas China Standard Small Cap indices.

Previously announced changes to the number of shares for three securities in the MSCI Russia Investable Market Index could come into effect at a semi-annual index review in May when the special treatment is lifted, MSCI said in the statement.

For non-cap weighted indices and custom indices such as MSCI Factor, ESG, Thematic and Capped Index, MSCI does not make changes, including constraining factors, with respect to securities classified in Russia.

MSCI said it will continue to monitor developments in Ukraine and welcomes market participants’ feedback on the impact of the new sanctions.

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