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Global index provider MSCI has given Türkiye until its November 2026 index review to demonstrate meaningful progress on market transparency and trading practices, warning that a failure to deliver could trigger a consultation on the future treatment of Turkish equities in its widely followed indexes.
The warning emerged in MSCI's 2026 Market Classification Review, which highlighted concerns raised by international institutional investors over shareholder transparency and possible coordinated trading activity in Türkiye's stock exchange, Borsa Istanbul.
MSCI stopped short of announcing any immediate classification change.
However, it signaled that tangible and credible improvements must be visible before the November 2026 MSCI Index Review, or it could begin a formal consultation process covering Türkiye and eligible Turkish securities.
According to MSCI, international investors have repeatedly pointed to cases of possible coordinated trading involving funds linked to certain smaller publicly listed companies.
The concern centers on free float, the portion of a company's shares considered freely available for trading in the market.
MSCI said some investors believe certain fund structures may create the appearance of a larger free float than actually exists, potentially distorting index calculations and market pricing.
The company acknowledged a recent decision by Türkiye's Capital Markets Board (CMB) to revise free-float calculations.
Under the new framework, shares held indirectly through hedge funds and certain fund structures by investors already classified as non-free-float shareholders will no longer be included in a company's free-float ratio.
MSCI described the move as a positive step but noted that "market participants want to see the impact of these adjusted calculations in practice."
The index provider added that international investors are looking for "further progress," including "granular and timely disclosure of beneficial ownership, robust surveillance and enforcement against coordinated trading behavior, and a transparent, rules-based framework for the identification and treatment of securities exhibiting structurally distorted free float."
Although MSCI did not announce any downgrade or reclassification of Türkiye, the prospect of a consultation is significant because the firm's indexes are used by global asset managers to benchmark portfolios and guide investment decisions.
MSCI noted that concerns over shareholder transparency and trading practices "materially limit investors' ability to assess true free float and to rely on observed market prices for portfolio construction and index replication."
A consultation would not automatically result in a change to Türkiye's emerging-market status. However, it would place the market under closer scrutiny and could eventually lead MSCI to consider alternative treatments for Turkish securities if investor concerns persist.
The warning also comes after MSCI downgraded Türkiye in the Information Flow category of its 2026 Global Market Accessibility Review.
Türkiye was one of only two emerging markets, alongside Indonesia, to receive a downgrade in the Information Flow category this year, citing "investability concerns remain due to limited transparency in shareholding structures and coordinated trading behavior that undermines proper price formation."
MSCI, one of the world's most influential index providers, develops benchmarks tracked by trillions of dollars in global investment assets.
Its market classification reviews are closely watched because they help determine how countries are represented in international portfolios and whether they meet the accessibility standards expected by institutional investors.
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