Morgan Stanley Capital has announced amendments to the rebalancing policy of MSCI Equity Index. The changes are effective June 1.

MSCI says full country index reviews will be conducted annually and resulting changes will be implemented each year at the end of May.

Quarterly index reviews will be carried out at the end of February, August, and November to reflect important market driven changes that were not captured in the index at the time of their actual occurrence and should not wait until the full country index review due to their importance.

The quarterly index reviews may result in additions or deletions, and changes in Foreign Inclusion Factors or number of shares. Most event-related changes, such as mergers and acquisitions will continue to be implemented on their effective dates.

MSCI says the new policy offers several benefits. It improves the transparency of the timing and frequency of the index rebalancing process, and it clearly distinguishes between significant changes that should to be reflected earlier than at a full country review.

As well, the distribution of changes in the indices between the quarterly index reviews and the annual full country index reviews will help in reducing the concentration of turnover at the annual full country index reviews.