Greece controls could relegate it to 'standalone' equity market - MSCI

[June 29, 2015] LONDON (Reuters) - Index provider MSCI said on Monday that the closure of the Athens stock market and the imposition of capital controls could lead to Greece's relegation from the benchmark emerging equity index and its reclassification as a "standalone" market.

As Greece appears to be headed for default, its government has ordered the closure of the stock market and banks until at least after July 5 when it will hold a referendum on the loan package proposed by its creditors.

Capital controls have also been put in place to prevent a run on banks.

MSCI, which has $1.7 trillion benchmarked to its emerging market index <.MSCIEF>, said it was analyzing the situation.

"As per the MSCI Market Classification Framework, the introduction of prolonged restrictive measures, which result in a material deterioration in the accessibility of the Greek

equity market, may lead to the reclassification of the MSCI Greece Index to Standalone Market status from Emerging Markets status," MSCI said.

It said any action would be preceded by a consultation with market participants.

(Reporting by Sujata Rao; editing by Mike Dolan)

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