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Strategy challenges MSCI screen that could exclude Bitcoin treasury firm

The dispute centers on MSCI’s planned “non-operating company” methodology, and Strategy says it would create a financial consequence by increasing the costs and complexity of MSCI’s operations.

Reported · Written up by our desk · Market Structure

Crypto treasury company Strategy is contesting an MSCI proposal that would expand exclusions for “non-operating companies” in its Global Investable Market Indexes, arguing the index provider is effectively deciding whether Bitcoin belongs in an operating business.

CryptoSlate reports Strategy says MSCI’s new screening approach conflicts with arguments the index provider previously made to the Securities and Exchange Commission, including MSCI’s position that it expresses no opinion on whether investments or markets are good or bad. Strategy also argues there are no defined operating or non-operating categories under GAAP or IFRS for the classifications MSCI is seeking to apply.

MSCI opened the consultation on Aug. 3 as part of a plan to broaden existing exclusions for investment funds and business development companies, using a core screen and five financial ratios, with four trigger flags making a company ineligible for certain index universes.

CryptoSlate adds that Strategy claims the proposal is discriminatory, arbitrary, and misguided, and argues the SEC dispute over index construction neutrality could take on new importance. Strategy also alleges MSCI’s own filings tie adviser-style obligations to higher operational costs and complexity, making the regulatory argument it cites a point of financial exposure for MSCI.

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