MSCI to allow overseas listings to be included in major indexes
Monday, 19 January 2015 00:09
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NEW YORK (Reuters): Index provider MSCI Inc said it plans to change its rules to allow foreign-listed companies traded outside of their home countries to be included in its Global Investable Market Indexes.
The move would allow so-called ‘orphan companies’ such as Chinese online retailer Alibaba and China’s online search engine Baidu Inc to be eligible for potential inclusion in both MSCI Global Indexes and MSCI Country Indexes.
Previously companies that were based in one region, but whose shares were listed in a different region were not allowed to be included into MSCI’s largest emerging markets indices.
The much anticipated decision follows months of consultation with market participants.
“Foreign listed companies would be eligible for the MSCI Country Indexes where they would represent a material proportion of the index market capitalisation,” MSCI said in a statement late on Thursday.
MSCI said it plans to add foreign-listed companies only in countries where they would ‘materially increase’ the coverage of their indexes.
