MSCI Freezes Turkish Index Changes, Warns of June 2027 Deadline

News: Gökhan Turhan

MSCI has frozen certain index changes involving Turkish equities until further notice. If sufficient progress is not achieved by June 2027, a review of Türkiye’s emerging market status could be considered.

MSCI has decided to temporarily freeze certain index changes related to Türkiye’s capital markets. According to an announcement issued in New York on October 15, 2026, the decision covers specific changes to Turkish equities resulting from index reviews and corporate events. The measure took effect immediately, and MSCI will not implement certain index updates until further notice.

Coordinated Trading and Free Float Ratios Under Scrutiny

As part of its 2026 Market Classification Review, MSCI highlighted serious concerns raised by institutional investors regarding the Turkish market. The concerns focused on possible coordinated trading through fund holdings closely affiliated with certain smaller listed companies. MSCI warned that such activity could undermine the reliability of free float estimates and market integrity.

MSCI stated that it expects tangible and credible progress in addressing these issues. This includes detailed and timely disclosure of beneficial ownership, effective surveillance and enforcement mechanisms against coordinated trading, and a transparent, rules-based framework for identifying and treating securities with structurally distorted free float.

Existing Regulatory Measures Not Yet Considered Sufficient

According to MSCI, Turkish authorities have introduced a framework under which fund-held stakes are excluded from free float calculations when the beneficial owner is already excluded.

However, MSCI emphasized that these measures represent only an initial step. To restore investor confidence, institutional investors need to see credible and sustained enforcement against coordinated trading, as well as disclosure standards that allow the free float of Turkish securities to be independently verified. MSCI stressed that these measures must be applied consistently across the market.

The index provider also stated that it will continue gathering feedback from market participants to assess whether the measures are delivering the structural improvements investors expect.

Which Index Changes Have Been Frozen?

Under the decision, MSCI will suspend certain index-related changes involving Turkish equities. The freeze covers:

• Increases in the Foreign Inclusion Factor (FIF),
• Increases in the Number of Shares (NOS),
• Additions of new securities to the MSCI Turkey Investable Market Index (IMI),
• Upward migrations between market capitalization size-segment indexes.

MSCI will continue to closely monitor the Turkish equity market, focusing on the effectiveness of regulatory changes and enforcement measures.

June 2027 Deadline Set for Progress

MSCI announced that it will consider additional measures if tangible evidence of sufficient progress is not available by June 2027. These measures could include launching a consultation on the potential reclassification of Türkiye’s indexes from the Emerging Market category to either Frontier Market or Standalone Market status.

The treatment of the MSCI Turkey Indexes will be reassessed as part of MSCI’s 2027 Annual Market Classification Review.

Kaynak: MSCI – Announcement dated October 15, 2026