CONSULTATION ON PROPOSEDENHANCEMENTS TO THECORPORATE EVENTS METHODOLOGYIN THE MSCI INDEXES

February 2016

© 2016 MSCI Inc. All rights reserved.
Please refer to the disclaimer at the end of this document.

SUMMARY OF PROPOSALMSCI opens a consultation on a proposal around its Corporate Event Methodology
and related treatment with regards to the following:
1) A general adaptation of a ‘neutral impact’ implementation approach tocorporate events within non-cap weighted indexes*
2) Providing a new framework for qualifications of spin-offs in non-cap weighted
indexes3) Implementing enhancements to the treatment of US share offerings andacquisitions
4) Introduction of a ‘Share Freeze’ window around Index Reviews
MSCI welcomes feedback from the investment community on the proposal. MSCI
will announce the results of the consultation on or before April 15, 2016.
Please note that this consultation may or may not result in any changes to the MSCI
Indexes or methodologies.

*See Index Categorization slide2EVENT IMPLEMENTATION IN NONCAP WEIGHTED INDEXES© 2016 MSCI Inc. All rights reserved.
Please refer to the disclaimer at the end of this document.

MSCI INDEX CATEGORIZATION
For the purposes of understanding how corporate events methodology and application
may differ within index weighting construct, the categorizations noted below should beconsidered with regards to the proposal.
Index weighting frameworks

1) Market Cap Weighted•

GIMI Based Indexes2) Capped (Market Cap) Weighted•

10/40;25/50 Based Indexes•

Selection Based Indexes that may have some ‘group’ defined cap

Referred to collectively as Market Cap Weighted1) Non Market Cap Weighted/Modified Market Cap Weighted•

Selected Factor Based Indexes•

Optimized Indexes•

Tilt Indexes (Modified Market Cap Weighted)

2) Equal Weighted
Referred to collectively as Non-Cap Weighted
4

BACKGROUND/PROPOSAL• Non-cap weighted indexes (those whose constituents are not solely weighted
by free-float adjusted market capitalization) should generally only experiencemarket capitalization changes that are borne out of underlying stock pricemovement.
• The central principles through which non-cap weighted indexes areconstructed employ a methodology where constituent weightings should
theoretically not be affected by market capitalization changes arising from
corporate event implementation.

• This group of indexes are viewed as market capitalization neutral, whereby
selective corporate event impact would be ‘neutralized’ by the presence of avariable weighting factor.
• Additionally, the proposal of a ‘market neutral’ corporate event methodology
for M&A treatment in non-cap weighted indexes will foster an approach that is
in line with the true proportionate consideration exchanged in a merger
transaction and consequently, replicates investor experience.
5

VARIABLE WEIGHTING FACTOR (VWF)
To guide implementation of the aforementioned ‘neutral’ approach, MSCI proposes
the introduction of a new factor into the index weighting calculation for non-cap
weighted indexes.
The change in market capitalization that occurs as a result of a relevant corporate
event will be offset by a corresponding change in the newly introduced Variable
Weighting Factor (VWF).

• The VWF will provide the adjustment factor that can adjust any constituent
weighting while maintaining overall index market capitalization.
• The result will be a deferral of significant weighting changes occurring from
corporate event implementation and minimize index turnover outside of Index
Reviews.

6

PROPOSAL IMPACT: VWF APPLICATION WITH SHAREOFFERING/PLACEMENT IN EM RISK WEIGHTED INDEX

Index

EM Risk Weighted

Constituent

CITIC Securities

Corporate Event TypePrivate Placement

Pre-Event Security Market Cap

2,104,038,445

Pre-Event Security Weight (%).05158

Private Placement Amount

1,100,000,000

Post-Event Security Market Cap

4,067,951,480

Post-Event Security Weight (%).09962

WEIGHT INCREASE (%)

93.14
7

PROPOSAL IMPACT: VWF APPLICATION WITH SHAREOFFERING/PLACEMENT IN EM RISK WEIGHTED INDEX
Under the current corporate event methodology, the weight of CITIC increased 93% as a resultof the implementation of the private placement. This change would create portfolio turnoverthat would likely be reversed at the subsequent index review.
With the proposed introduction of the VWF, changes in the number of shares and/or FIF as aresult of offerings and placements would be treated as market capitalization neutral which
would result in the weight of CITIC being unaffected.

8

PROPOSAL IMPACT: VWF APPLICATION WITH RIGHTS OFFERINGIN EMU EQUAL WEIGHTED INDEXIndex

EMU Equal Weighted

Constituent

Raiffeisen Bank Int’lCorporate Event Type

Rights Offerings

Pre-Event NOS

195,783,772

Pre-Event FIF.25

Pre-Event Security Market Cap
Pre-Event Security Weight (%)

14,112,065.68009Post-Event NOS

293,257,686

Post-Event FIF.40

Post-Event Security Market Cap

24,315,566

Post-Event Security Weight (%)

1.1718

WEIGHT INCREASE (%)

72
9

PROPOSAL IMPACT: VWF APPLICATION WITH RIGHTS
OFFERING IN EMU EQUAL WEIGHTED INDEX
Under the current corporate event methodology, the weight of Raiffeisen increased
72% as a result of the rights offering implementation. The Price Adjustment Factor(PAF) and Number of Shares (NOS) increase on ex-date and the fact that constraint
factors are maintained in the index caused a constituent weighting change.
Under the proposed methodology, and with the introduction of the VWF, the share
increase and price adjustment would be implemented, but the VWF would adjust toensure no change occurred in security market capitalization due as a result of event
implementation.

10

MERGERS AND ACQUISITIONS•

Under the current corporate events methodology, treatment of mergers andacquisitions (M&A) in non-cap weighted indexes generally involve amaintenance of the acquiring constituent with a constraint factor that is theweighted average of the pre-event constraint factors. The generalassumption is that M&A terms are for shares only.

•

With the proposed methodology, M&A implementation would focus on aweighted average calculation that takes into account the actual proportion of
cash and share consideration terms. Hence for cash M&A, a security
weighting would not change and for any consideration that involved shares,
the weighted average calculation would take into account the percentage ofshares involved and adjust accordingly. Additionally, there would be
modification of treatment with events that involved ‘non-index’ constituents.

•

The proposed change would employ an approach in our non-cap weighted
indexes that was effectively market neutral, with no exceptional portfolio
adjustments required by investors related to implementation of these typesof events.

11

MERGERS AND ACQUISITIONS PROPOSAL OVERVIEW: NON-CAP WEIGHTED INDEXESCONSIDERATIONCASHSHARES

CASH/SHARESALL TYPESCONSTITUENTS

CURRENT METHODOLOGYPROPOSED METHODOLOGYINDEX/INDEX

Implementationconsistent with shareconsideration treatment

Maintain Acquirer/Remove Target company inrespective index. Cash consideration reinvested
across the entire index; no constituent weightingchangeINDEX/INDEXNew company is added with aconstraint factor that is theweighted average of the twoconstituents

New company is added with a constraint factor that is
the weighted average of the two constituents.

INDEX/INDEXNew company is added with aconstraint factor that is theweighted average of the twoconstituents (assumes sharesare 100% of the consideration).

Weighted average of constraint factors should be
proportionately adjusted to take into accountshare/cash consideration split. As implementation is
proportionate, the acquirer’s new weight follows anadjustment for the share portion of theconsideration, with cash proceeds invested across theindex.

INDEX/NON-INDEXNew company is added with aconstraint factor that is theweighted average of the twoconstituents where CF oftarget=0. Alternatively, if theacquired constituent is not in
the Parent index, then theconstraint factor does notchange.

If an existing Index constituent is acquired by a nonIndex constituent (regardless of consideration), theexisting constituent should be deleted from the index
and the acquiring non-constituent should not be
added to the index.
If an existing index constituent acquires a non-index
constituent for stock, then the existing constituent
should remain in the index , the constraint factor
should be maintained and the VWF should berecalculated to ensure no change in security market
capitalization due to NOS/FIF increase.

12

PROPOSAL IMPACT: MERGER/ACQUISITION IN USA EQUAL WEIGHTED INDEXNEW METHODOLOGY
Index

USA Equal Weighted

Corporate Event Type

Merger/Acquisition

Consideration

100% Cash

Acquirer (Index Constituent)Rock-Tenn Co A

Target (Index Constituent)

Mead-Westvaco

New Company

WestRock Company

Acquirer Constraint Factor

3.364645

Acquirer Index Weight (%).1478

Target Constraint Factor

3.816841

Target Index Weight (%)

0

New Company Constraint Factor

3.364645

New Company Index Weight (%)

.1478
13

PROPOSAL IMPACT: MERGER/ACQUISITION IN USA EQUAL WEIGHTED INDEXNEW METHODOLOGY
Index

USA Equal Weighted

Corporate Event Type

Merger/Acquisition

Consideration

100% Shares

Acquirer (Index Constituent)Rock-Tenn Co A

Target (Index Constituent)

Mead-Westvaco

New Company

WestRock Company

Acquirer Constraint Factor

3.364645

Acquirer Index Weight (%).1478

Target Constraint Factor

3.816841

Target Index Weight (%).1484

New Company Constraint Factor

3.577029

New Company Index Weight (%)

.2918
14

PROPOSAL IMPACT: MERGER/ACQUISITION IN USA EQUAL WEIGHTED INDEXNEW METHODOLOGY
Index

USA Equal Weighted

Corporate Event Type

Merger/Acquisition

Consideration

Mixed (80% shares/20% cash)

Acquirer (Index Constituent)Rock-Tenn Co A

Target (Index Constituent)

Mead-Westvaco

New Company

WestRock Company

Acquirer Constraint Factor

3.364645

Acquirer Index Weight (%).1478

Target Constraint Factor

3.816841

Target Index Weight (%).1484

New Company Constraint Factor

3.552169

New Company Index Weight (%)

.2813
15

PROPOSAL IMPACT: MERGER/ACQUISITION IN WORLD
DIVERSIFIED MULTI FACTOR INDEX (INDEX/NON-INDEX)
Under the current corporate event methodology, with a merger/acquisition between index and non-index
constituents, the new company is added with a constraint factor that is the weighted average of the twoconstituents (where the constraint factor of the non-index constituent is assumed to be zero).
Alternatively, if the acquired constituent is not in the Parent index, then the constraint factor does notchange.
With the proposed corporate event methodology:• If an existing Index constituent is acquired by a non-Index constituent (regardless ofconsideration type) the existing constituent will be deleted from the index and the acquiring
non-constituent will not be added to the index.
•

If an existing index constituent acquires a non-index constituent for stock, then the existing
constituent should remain in the index , the constraint factor should be maintained and thevariable weighting factor should be recalculated to ensure no change in security market
capitalization due to NOS/FIF increase.

16

DISCUSSION POINTS• Should MSCI adapt a general market-cap neutral methodology andapproach to corporate event implementation in its non-cap weighted
indexes through the introduction of the variable weighting factor?
• Should the proposed market neutral approach with regards to mergers
and acquisitions be universal in application? Should there be certain
indexes that neutralize the weight change immediately through avariable weighting factor adjustment (i.e. Equal Weighted
treatment/doubling of constituent weight)?
• Are there any classes/categorizations of indexes that should warrant
exceptional treatment (i.e. 10/40; 25/50 capped indexes)?

• What is the appropriate timing for implementation of the amended
corporate events methodology? Should the new methodologicaltreatment commence with an Index Review?

17

SPIN-OFF IMPLEMENTATION IN NONCAP WEIGHTED INDEXES© 2016 MSCI Inc. All rights reserved.
Please refer to the disclaimer at the end of this document.

PROPOSAL• In order to minimize turnover, all ‘new-cos’ resulting from spin offs in
non-cap weighted indexes should be added at the time of the event(assuming they are added to the Parent Index) subject to reevaluation at
the next Index Review.
• The proposal seeks to achieve an index construct that is sensitive toturnover implications, but avoids the index from including constituentsthat don’t conform to the theme of the index for an extended period of
time.

19

DISCUSSION POINTS• As the proposal may result in certain indexes holding non-compliant
companies till the next index review, should a distinction be made for
specific thematic indexes (i.e. Islamic, Ex-Controversial weapons, etc.)?
• In cases where the methodology effectively dictates that the ‘new-co’
will likely be excluded at the subsequent index review (i.e. those that
rely on extended history of data which would not be available at time ofqualification), would it be advisable not to include the ‘new-co’ at thetime of the event?
• In certain cases, when the next index review may not occur for a year,
would it be acceptable for the index to hold the ‘new-co’ for that periodof time without any interim qualification? Should there be a ‘Time to
Next Index Review’ guideline that should be followed?

20

US ACQUISITIONS© 2016 MSCI Inc. All rights reserved.
Please refer to the disclaimer at the end of this document.

BACKGROUND/PROPOSAL Current US acquisition treatment as noted in the MSCI Corporate Events
Methodology has a dependency on the receipt of delisting notices.
 This often results in a large number of intraday announcements andimplementations which can potentially cause replication issues for global investors.
 MSCI proposes to additionally clarify and simplify the methodology for US
acquisitions by:1.

Distinguishing treatment for US acquisitions done via tender offer or via
agreement.

2.

Streamlining the announcement policy related to such events

3.

Changing the criteria which determines if an acquisition can be deemedunconditional

4.

Eliminating intraday implementation related to these events

5.

Provide explicit clarification of index maintenance/deletion prices that are used
22

TENDER OFFERS
MSCI proposes to distinguish between hostile and friendly tender offers as follows: For hostile tender offers:
Treatment:
MSCI will wait for results to implement changes, if any, and provide 2 full business days ofadvance notification prior to implementation.
Communication:
MSCI will send announcements with a “acknowledge” status 1, as soon as practical.
 For friendly tender offers:
Treatment – If the offer is deemed likely to be successful, MSCI will implement changes, if any,at the end of the offer period or if necessary, wait for the results and provide 2 full businessdays of advance notification prior to implementation.
Communication:
MSCI will send announcements with a “undetermined” status as soon as practical, regardless if
it is deemed likely to be successful or not.
If the offer is deemed likely to be successful, MSCI will send announcements with a“confirmed” status 2 full business days prior to the end of the tender offer period. Otherwise,
MSCI will wait for the actual offer results and provide 2 full business days of advance
notification prior to implementation.
1 “Acknowledge” announcement status only shows the current data of the companies involved in the event.

23

AGREEMENTS
MSCI proposes to distinguish between US acquisitions made via agreement in the following manner:
 For agreements where only a shareholders’ meeting is still pending (i.e. no pending regulatory
approvals needed):
Treatment:
MSCI will implement changes with an effective date of the day after the shareholders’ meeting occurs.
Communication:
MSCI will send announcements with a “undetermined” status as soon as practical.
MSCI will send announcements with a “confirmed” status 2 days prior to the date of the shareholders’meeting.
 For agreements where regulatory approvals are pending:Treatment:
MSCI will implement changes when the acquisition can be deemed unconditional1
Communication:
MSCI will send announcements with a “undetermined” status as soon as practical.
MSCI will send announcements with a “confirmed” status when the acquisition can be deemedunconditional and will provide 2 full business days of advance notification prior to implementation.
1 pending lawsuits, marketing periods, financial conditions , etc. will not be considered as blocking conditions for thecompletion of acquisitions via agreement.
24

DELETION PRICE
When the target security in a US acquisition is delisted from the Stock Exchange prior to
the deletion from the MSCI Indexes, MSCI proposes to:-

Maintain the target security at its last traded price.

-

Delete the target security at the offer price.

Example:On January 18, MSCI announces in a “confirmed” status the deletion of Company A from
the MSCI Indexes as of the close of January 20 (effective on January 21), providing 2 fullbusiness days advance notice. On January 19, the stock exchange announces it will beCompany A’s last trading day.
January 19: Company A is maintained in the MSCI Indexes at today’ s closing market price.
January 20: Company A is maintained in the MSCI Indexes at the offer price1.
January 21: Company A is deleted from the MSCI Indexes.
1 the offer price could be a cash amount or a calculated amount based on the closing market price of the acquirer on thatday if the acquisition’s consideration includes shares.
25

PROPOSAL IMPACT
 MSCI would provide 2 full business days of advance notification prior to
implementation of changes and would no longer have intraday announcements andimplementations for US acquisitions.
 By providing 2 full business days notice, MSCI would sometimes delete target
companies after their delisting from the Stock Exchange.
 MSCI would no longer wait for a delisting notice to deem US acquisitions as
unconditional.
 MSCI would no longer send an “undetermined” status announcements with postevent details for hostile tender offers.
 MSCI would no longer send “expected” status announcement for friendly tender
offers. Status would be changed from “undetermined” to “confirmed” (or“cancelled”) directly.
 MSCI would implement US acquisitions via agreement with no pending conditions
with an effective date the day after the shareholders’ meeting occurs.
26

DISCUSSION POINTS Do you agree with the proposal for MSCI to provide 2 full business days advancenotice to implement US acquisitions?

 Should MSCI announce hostile tender offers in the US using an “Acknowledged”
status instead of an “Undetermined” one given the information that will be
provided?

 For US tender offers deemed ‘friendly’, should MSCI use only “undetermined” and“confirmed’ announcement statuses and no longer use the “expected” one?

 In cases where the target company is delisted from the stock exchange prior to thedeletion of the company from the MSCI Indexes:
 Should MSCI maintain the company in the Indexes at its last traded price (asproposed) or at the offer price?
27

US OFFERINGS© 2016 MSCI Inc. All rights reserved.
Please refer to the disclaimer at the end of this document.

BACKGROUND/PROPOSAL MSCI currently announces and often implements public and secondaryofferings in the US with less than one full business day of advance
notification.

 MSCI proposes to implement all US public and secondary offerings with 2 fullbusiness days advance notification from the day they are priced.
 In addition, MSCI proposes to increase the Micro-Cap implementationthreshold to 25% (from 5%) for the implementation of public and secondaryofferings of in the US to be consistent with the global implementation.

29

PROPOSAL• Proposal for change in Implementation Timing

 MSCI proposes to implement all US Public and Secondary offerings above the 5%
threshold giving 2 full business days of advance notification from the day they
are priced (assuming all necessary information is publicly available on that day).
MSCI will announce changes at the end of day (no Intraday announcements).
=> Rationale is to give 2 full business days advance notice for Index replication
to all clients.
• Proposal for change in Implementation Thresholds for Micro Caps
 MSCI proposes to implement all US Public and Secondary offerings above 25%
for micro cap securities at the time of the event. This would be a change fromthe pre-existing threshold of 5%.1=> Rationale is to align the threshold for US public/secondary offerings for
Micro cap securities with the current ‘global’ micro cap threshold of 25%.

1 MSCI expects that the number of implemented public and secondary offerings in the US would decrease by approximately one-half30

US OFFERINGS- PROPOSAL OVERVIEW
Primary offerings
Methodology

Announcement

Advancenotification

Thresholds
for IMI1

Thresholds for
Micro Caps

US (current)

IntradayLess than 1 day

5%

5%

US (proposed)

End of day

2 full days

5%

25%

GlobalEnd of day

2 full days

5%

25%

Secondary offerings/Block Sales
Methodology

Announcement

Advancenotification

Thresholds
for IMI1

Thresholds for
Micro Caps

US (current)

IntradayLess than 1 day

5%

5%

US (proposed)

End of day

2 full days

5%

25%

GlobalEnd of day

2 full days

1

1 billion for DM, 500 million for EM

IMI: Investable Market Indexes comprises Large, Mid and Small Caps
31

PROPOSAL IMPACT• Benefits of the proposal for new implementation Timing
 Consistent with the global implementation of offerings/private placements.
 Clients will be able to replicate changes, regardless their location.

• Benefits of the proposal for new implementation Thresholds for Micro Caps

 MSCI to be consistent in the implementation of all public offerings globallyi.e. above 5% for Large, Mid, Small / above 25% for Micro cap securities.

32

DISCUSSION POINTS Shall MSCI provide 2 full business days advance notice to implement US
public and secondary offerings?

 Shall MSCI increase the implementation threshold for US public andsecondary offerings for Micro caps from 5% to 25%?

33

SHARE FREEZE© 2016 MSCI Inc. All rights reserved.
Please refer to the disclaimer at the end of this document.

BACKGROUND/PROPOSAL• MSCI proposes that a “share freeze” should be implemented during each quarterly Index
Review. The qualification of what is included in the share freeze should be those eventswith a confirmed implementation effective date of 5 business days before and 2 businessdays after the effective date of the Index Review.
• The “share freeze” would pertain strictly to share offerings and placements that are
standalone. Corporate event implementation that relates to M&A activity, rights offerings,
or the array of ‘market neutral’ events would be implemented as per usual. Deferred event
implementation due to suspensions would also not be affected.
• Corporate Events that are effected by the ‘freeze’ would be implemented (cumulatively) on
the effective date of the respective Index Review.
• The proposed implementation of the share freeze will result in considerably less ‘noise’ interms of both trading and announcements; primarily in the time leading up to the Index
Review effective date. It will create a cleaner window for the portfolio adjustments
executed into the effective date of an Index Review.

35

PROPOSAL IMPACT
The following indicates the number of relevant Corporate Events (Standalone
Placement/Offerings) that were announced with an effective date of implementation that
occurred during the proposed window (t-5/T+2) of a Share Freeze period.
August 2015 QIR:

1 EVENT

4,000,000 NOS

May 2015 SAIR:

8 EVENTS

60,000,000 NOS

February 2015 QIR:

21 EVENTS

297,000,000 NOS

November 2014 SAIR:

10 EVENTS

313,000,000 NOS

36

DISCUSSION POINTS• Should MSCI consider the implementation of a share freeze aroundIndex Review?
• Should MSCI use the Index Review effective date as the date for
cumulative implementation of events that are affected by the ‘sharefreeze’?
• Is the event timing qualification of 5 days prior and 2 days post Index
Review a sufficient window for share freeze inclusion?

37

SELECTIVE TOPIC DISCUSSION© 2016 MSCI Inc. All rights reserved.
Please refer to the disclaimer at the end of this document.

SELECTIVE TOPIC DISCUSSION
UNIVERSAL GLOBAL THRESHOLD FOR SHARE OFFERINGSMSCI currently uses different thresholds to determine if an offering qualifies for
immediate implementation. Implementations vary depending on the event type, thecountry and the size segment of the company.

1.

Should MSCI consider the application of a universal threshold for all
share offerings, block sales, etc. event implementation?

2.

If a universal threshold is applied, should it be an absolute threshold(USD amount) or a percentage threshold?

3.

In assessing whether a given offering meets the relevant threshold,should MSCI include any FIF/NOS updates to assess if the event qualifies
for immediate implementation?
39

SELECTIVE TOPIC DISCUSSIONIPO GREENSHOE OPTIONMSCI currently announces ‘fast track’ IPO additions to the MSCI Indexes with a “confirmed’ status on
the 1st or 2nd trading day of a newly issued security. The security is added to indexes as of the close of
its 10th trading day. Generally, the greenshoe option is not exercised at the time of the “confirmed”
announcement and consequently, MSCI does not reflect this at the time of the addition.
1. In cases where the greenshoe option is exercised between the “confirmed” announcement and the
security addition to the MSCI Indexes, should MSCI reflect the greenshoe option?
2. Should there be at least 2 full business days given prior to the effective date of the addition for
MSCI to reflect the greenshoe option?
TIMING OF SIZE MIGRATIONS RELATED TO CORPORATE EVENTSMSCI Size Segmentation reviews are performed when a company’s full market capitalization is changing
by at least +50%/-33% due to a corporate event. Based on estimated post-event market
capitalizations, the security may qualify to migrate from one size segment to another at the time of theevent (e.g. from Small Cap to Mid Cap). Currently, MSCI implements size migrations as of the close of
the ex-date of corporate events, such as spinoffs.
1. Should MSCI consider implementing size migrations on another date (e.g. cum-date), when
deemed beneficial for replication purposes?

40

SELECTIVE TOPIC DISCUSSION
UNIVERSAL TREATMENT FOR RIGHTS ISSUES IMPLEMENTATION
Highly dilutive rights issues for new underlying shares (i.e. where terms are 5 for 1 or more)and non-highly dilutive rights issues are currently implemented differently in MSCI Indexes.
• Non-highly dilutive rights issues are implemented with a Price Adjustment Factor (PAF) on
the ex-date based on the terms of the rights issue and shares are increased as of the closeof the ex- date.
• Highly dilutive rights issues are implemented with a PAF on the ex-date using the market
price of the rights if trading (intrinsic value if not trading) and with the additions ofsubscription cash and rights in the index, through detached securities. Shares are increased
as of the close of the pay-date. Upward size segment migrations from the Small Cap toStandard Index resulting from rights issues are also implemented as per the above
description.
1. Should MSCI consider a universal application of rights treatment, similar to the current
highly dilutive rights issue implementation (i.e. systematically adding the subscription cash
and the rights in the index and implementing share increases at the pay-date for all rights
issues)?
41

ABOUT MSCIFor more than 40 years, MSCI’s research-based indexes and analytics havehelped the world’s leading investors build and manage better portfolios.
Clients rely on our offerings for deeper insights into the drivers of
performance and risk in their portfolios, broad asset class coverage andinnovative research.
Our line of products and services includes indexes, analytical models, data,
real estate benchmarks and ESG research.
MSCI serves 98 of the top 100 largest money managers, according to themost recent P&I ranking.
For more information, visit us at www.msci.com.

42

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43

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It is not possible to invest directly in an index. Exposure to an asset class or trading strategy or other category represented by an index is only available through third party investable instruments (if any) based on that index. MSCI does not issue,
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The Information may contain back tested data. Back-tested performance is not actual performance, but is hypothetical. There are frequently material differences between back tested performance results and actual results subsequently achieved byany investment strategy.
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Data and information produced by various affiliates of MSCI Inc., including MSCI ESG Research Inc. and Barra LLC, may be used in calculating certain MSCI indexes. More information can be found in the relevant index methodologies on www.msci.com.
MSCI receives compensation in connection with licensing its indexes to third parties. MSCI Inc.’s revenue includes fees based on assets in Index Linked Investments. Information can be found in MSCI Inc.’s company filings on the Investor Relations
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MSCI ESG Research Inc. is a Registered Investment Adviser under the Investment Advisers Act of 1940 and a subsidiary of MSCI Inc. Except with respect to any applicable products or services from MSCI ESG Research, neither MSCI nor any of its products
or services recommends, endorses, approves or otherwise expresses any opinion regarding any issuer, securities, financial products or instruments or trading strategies and MSCI’s products or services are not intended to constitute investment advice ora recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Issuers mentioned or included in any MSCI ESG Research materials may include MSCI Inc., clients of MSCI or suppliers to MSCI, andmay also purchase research or other products or services from MSCI ESG Research. MSCI ESG Research materials, including materials utilized in any MSCI ESG Indexes or other products, have not been submitted to, nor received approval from, theUnited States Securities and Exchange Commission or any other regulatory body.
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MSCI or its subsidiaries in the United States and other jurisdictions. The Global Industry Classification Standard (GICS) was developed by and is the exclusive property of MSCI and Standard & Poor’s. “Global Industry Classification Standard (GICS)” is aservice mark of MSCI and Standard & Poor’s.

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