Intro text - Market Classification 2023

MSCI evaluates equity markets around the world each year to determine whether they should be classified as a developed, emerging, frontier or standalone market. This review is critical to how we construct our equity market indexes.

We consider the views and practices of the international investment community and assess a market’s economic development, accessibility and investability.


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Criteria - Market Classification 2023

The MSCI Market Classification Framework uses three criteria to evaluate markets:

  • Economic development

    Considers economic development sustainability; only used to determine classification of developed markets

  • Size and liquidity requirements

    Determines those securities that meet the minimum investability requirements of the MSCI Global Standard Indexes

  • Market accessibility

    Aims to reflect international institutional investing experiences in a given equity market based on five market accessibility criteria

As part of the annual market classification review, MSCI communicates the list and analysis of equity markets under each category (Developed, Emerging, Frontier and Standalone), as well as the markets, if any, under review for potential market reclassification in the upcoming cycle.

For more information, see the MSCI Market Classification Framework (PDF, 316 KB)


Why - Market Classification 2023

Why does a market classification matter?

A market classification is a key input in index construction. By grouping markets according to common characteristics, we are helping investors better understand and compare different markets.

In addition, MSCI’s Market Classification includes a Market Accessibility review which seeks to reflect investors’ real-life experience in accessing and transacting in each market, in addition to a detailed and thorough analysis of existing regulatory frameworks.

The Annual Market Classification Review is designed to ensure that MSCI indexes accurately group the equity markets they measure to allow investors to compare markets and appropriately aggregate markets into regions and other combinations. We also aim to provide ample notice to investors and markets of potential changes to minimize impact.

Every June, MSCI first announces the results of the Annual Market Accessibility Review which covers all markets within our investable universe. Shortly after, MSCI announces the results of the Annual Market Classification Review.

 

Results of MSCI 2024 Market Classification Review

On June 20, 2024, MSCI announced the results of the MSCI 2024 Market Classification Review. Select highlights of this year’s review includes MSCI:

  • Launching a consultation on the potential reclassification of Bulgaria from Standalone to Frontier Market status - Consultation Document (PDF, 753 KB)
  • Continuing to monitor the implementation of measures aimed at improving the accessibility of the Korean equity market for international investors, but also noting that the recent short selling ban introduces market accessibility restrictions
  • Noting recent improvement in the liquidity of the Egyptian foreign exchange market while warning on the potential implications of deteriorations reoccurring
  • Continuing to monitor the market accessibility of the Bangladesh equity market
  • Highlighting the evolution of clearing and settlement cycles across global markets

Please refer to MSCI 2024 Market Classification Review Press Release for more details.

 

Results of MSCI 2024 Global Market Accessibility Review

On June 6, 2024, MSCI announced the results of the 2024 Global Market Accessibility Review. The detailed report includes market accessibility assessments for 85 markets, now including Niger.

The results of the MSCI Global Market Accessibility Review are announced before the MSCI Annual Market Classification Review in June of each year. The MSCI 2024 Market Classification Review was announced on June 20, 2024.

Market Classification Consultations

Consultation on a Potential Subcategorization of Frontier Markets

Several markets, currently classified as Frontier Markets (FM) exhibit significantly higher levels of Market Accessibility than the standards typically associated with FM. These markets are categorized as FM mostly due to their size and liquidity profile.
  • MSCI proposes to create a subcategorization to bundle together "Advanced Frontier Markets", which are those that exhibit strong market accessibility but are categorized as FM due to their size and liquidity.
  • MSCI welcomes feedback from the investment community on both topic until March 31, 2025. MSCI will announce the results of the consultation in Q2 2025. Consultation Document

Consultation on a Potential Enhancement to the Size and Liquidity Requirements of the MSCI Market Classification Framework

A proposal to enhance the Size and Liquidity Requirements of the MSCI Market Classification Framework.
  • MSCI proposes to incorporate Entry and Maintenance criteria into the existing Size and Liquidity Requirements.
  • The proposed Size and Liquidity Entry and Maintenance Requirements aim to increase the stability of market classifications by potentially reducing the risk of reverse reclassifications, providing more transparency into the classification process, and ensuring that index continuity rules can be applied for a country index.
  • MSCI welcomes feedback from the investment community on both topic until March 31, 2025. MSCI will announce the results of the consultation in Q2 2025. Consultation Document

Consultation on a Market Reclassification Proposal for Bulgaria from Standalone to Frontier Market Status

Consultation on potential reclassification of Bulgaria to Frontier Market status.
  • MSCI welcomes feedback from the investment community on the proposal on or before April 15, 2025. MSCI will announce the results of this consultation at the 2025 Market Classification Review.Consultation Document

The table below reflects the current Market Classification. Please refer to the latest Annual Market Classification Review for details.


Table - Market Classification 2023


Closing - Market Classification 2023

The MSCI’s Standalone Markets are broadly classified into two groups:

  • Newly eligible markets. Newly eligible markets may either be new markets, previously not covered by MSCI or markets that were closed to a specific group(s) of investors.
  • Markets previously classified under the Developed, Emerging or Frontier Markets categories. A reclassification to a Standalone status may occur in the case of severe deterioration in market accessibility or size and liquidity.

Previous Market Reclassifications (XLSX, 36 KB)


Footnotes - Market Classification 2023

1 The MSCI Standalone Market Indexes are not included in the MSCI Emerging Markets Index or MSCI Frontier Markets Index. However, these indexes use either the Emerging Markets or the Frontier Markets methodological criteria concerning size and liquidity.

2 EMEA – Europe, Middle East, and Africa

3 APAC – Asia Pacific

* The West African Economic and Monetary Union (WAEMU) consists of the following countries: Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal, and Togo. Currently the MSCI WAEMU Indexes include only securities classified in Benin, Burkina Faso, Ivory Coast, Niger and Senegal.


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