MSCI Removes Russian Securities From Emerging Markets Indexes After Deeming Them “Uninvestable”

Amidst Russia’s invasion of Ukraine, MSCI Inc. is removing Russian securities from the MSCI Emerging Markets Indexes after deeming the Russian equity market “uninvestable.” The index provider announced last week that the MSCI Russia Indexes will be reclassified to “Standalone Markets” instead of “Emerging Markets” across all MSCI’s indexes “at a price that is effectively zero.”

The MSCI Emerging Markets Index is the most widely followed gauge of stocks in developing economies in the world.

This decision was made after consulting with international institutional investors. After receiving feedback from the global investment community, “an overwhelming majority” of global market participants confirmed “that the Russian equity market is currently uninvestable and that Russian securities should be removed from the MSCI Emerging Markets Indexes.”

“Consultation participants highlighted several recent negative developments that led to a material deterioration in the accessibility of the Russian equity market to international institutional investors, to such an extent that it does not meet the Market Accessibility requirements for Emerging Markets classification as per the MSCI Market Classification Framework,” the announcement states.

MSCI already calculates more than 100 global and regional indexes that exclude Russia, such as MSCI Emerging Markets ex Russia, MSCI ACWI ex Russia, MSCI EM EMEA ex Russia, and MSCI EM Eastern Europe ex Russia, among others.