STANDARD ANNOUNCEMENTS - February 28, 2022 at 10:54 PM GMT 
Announcement for February 28, 2022 at 10:54 PM GMT

THIS IS AN ANNOUNCEMENT FOR THE MSCI GLOBAL STANDARD INDEXES

CONCLUSIONS FROM THE CONSULTATION ON THE REGIONAL CLASSIFICATION OF THE MSCI ISRAEL INDEX

MSCI Inc. (NYSE: MSCI), a leading provider of critical decision support tools and services for the global investment community, announced today the conclusions from its recent consultation with the investment community on the regional classification of the MSCI Israel Index.

At this time, market participants are divided on their views of the appropriate regional classification of the MSCI Israel Index for their investment processes, in particular due to the current misalignment of trading days between Israel and European markets. For the time being, MSCI has determined that it will retain Israel's regional classification within the Middle East and will continue to engage market participants on the topic regarding any significant market developments.

From December 15, 2021 to January 31, 2022, MSCI conducted a consultation to decide if the MSCI Israel Index should remain a part of the Middle East investment opportunity set or if it should be regionally classified elsewhere.  Throughout the consultation, MSCI received a substantial amount of feedback from both market and non-market participants.  As always, MSCI looks to fairly, accurately, and objectively account for the evolving needs of international institutional investors when reviewing consultation feedback.

As a reminder, in June 2012, MSCI formally solicited feedback from market participants around this topic.  At the time, a large majority of the international investment community did not see the rationale to view Israel as part of the European investment opportunity set.  The topic continues to pose a challenging question across global market participants. While many respondents to the recent consultation suggested that the MSCI Israel Index should be regionally reclassified to Europe, a significant portion of other respondents presented strong reasons against it.

Market participants who support a regional reclassification of Israel highlight the fact that many global investors currently utilize Europe and Asia as building blocks for their investment in developed markets, and that keeping the MSCI Israel Index within the Middle East could have the consequence of international institutional investors being less exposed to companies in Israel.  Additionally, stronger links over the last several years between Israel's and European macroeconomic indicators was stressed as a key reason that Israel should be reclassified to Europe.

Market participants who believe Israel's regional classification should remain unchanged emphasized geographical proximity as the primary driver when determining regional classification and voiced concerns on complexities that may arise when departing from this fundamental rationale when assigning other regional classifications in the future.  Additionally, they very strongly stressed the current misalignment of trading days between Israel and European markets as a key reason to keep Israel's regional classification within the Middle East.

MSCI recognizes that the views of global market participants on this topic will continue to evolve and MSCI will continue to actively seek feedback from market participants on this issue.

THIS IS AN ANNOUNCEMENT FOR THE MSCI GLOBAL STANDARD INDEXES

                                     End of announcement.
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