MSCI:N PRESS RELEASE Each June, MSCi communicates its conclusions based on discussions with the international investment community, on a list of markets under review. At that time, it also announces new markets to be reviewed for potential market reclassification in the upcoming cycle China a shares MSCI continues to observe positive market-opening developments in the chinese equity capital market In particular, it sees the recently-announced enhanced trading suspension regulation, the clarification regarding beneficial ownership and Qfll policy changes addressing restrictions on quota allocations and capital mobility as significant steps toward the eventual inclusion of china a shares in the mScI Emerging Markets index MSCi previously highlighted four issues to be resolved before the inclusion of china a shares in the msci Emerging Markets Index as part of the msci 2016 Annual Market Classification Review: 1. Beneficial ownership Most international institutional investors are satisfied with the clarification released by cSrc in early May 2016 about the beneficial ownership issues. Hence, MSCI considers this question to be resolved 2. Effectiveness of the QFll policy changes affecting accessibility and capital mobility International institutional investors need more time to work with the relevant regulator and gather experience regarding the recently implemented Qfil policy changes including policy enhancements intended to improve capital mobility. For example, a number of international investors said that they were still awaiting their QFll quota allocation for applications submitted months before. Other investors said that they were not yet able to benefit from daily capital repatriation despite the fact that policy changes went into effect in early february of this year. Positive experiences on quota applications as well as seamless execution of daily capital repatriation under the new rules, are itical considerations for international investors in supporting inclusion in the MSCI Emerging Markets Index Additionally, a large number of market participants highlighted the operational challenges surrounding the monthly repatriation limit that remained unaddressed as part of the recent capital mobility enhancements. Under current regulation, QFIl investors cannot repatriate on a monthly basis more than 20% of their prior-year net asset value this limit poses a potential liquidity concern for investors who need to honor redemption outflows from their clients, and thus must be removed or substantially increased with a shorter repatriation horizon, otherwise the effectiveness of the QFll channel would be significantly reducedPage | 3 PRESS RELEASE Each June, MSCI communicates its conclusions, based on discussions with the international investment community, on a list of markets under review. At that time, it also announces new markets to be reviewed for potential market reclassification in the upcoming cycle. China A shares MSCI continues to observe positive market-opening developments in the Chinese equity capital market. In particular, it sees the recently-announced enhanced trading suspension regulation, the clarification regarding beneficial ownership and QFII policy changes addressing restrictions on quota allocations and capital mobility as significant steps toward the eventual inclusion of China A shares in the MSCI Emerging Markets Index. MSCI previously highlighted four issues to be resolved before the inclusion of China A shares in the MSCI Emerging Markets Index as part of the MSCI 2016 Annual Market Classification Review: 1. Beneficial ownership Most international institutional investors are satisfied with the clarification released by CSRC in early May 2016 about the beneficial ownership issues. Hence, MSCI considers this question to be resolved. 2. Effectiveness of the QFII policy changes affecting accessibility and capital mobility International institutional investors need more time to work with the relevant regulator and gather experience regarding the recently implemented QFII policy changes, including policy enhancements intended to improve capital mobility. For example, a number of international investors said that they were still awaiting their QFII quota allocation for applications submitted months before. Other investors said that they were not yet able to benefit from daily capital repatriation despite the fact that policy changes went into effect in early February of this year. Positive experiences on quota applications, as well as seamless execution of daily capital repatriation under the new rules, are critical considerations for international investors in supporting inclusion in the MSCI Emerging Markets Index. Additionally, a large number of market participants highlighted the operational challenges surrounding the monthly repatriation limit that remained unaddressed as part of the recent capital mobility enhancements. Under current regulation, QFII investors cannot repatriate on a monthly basis more than 20% of their prior-year net asset value. This limit poses a potential liquidity concern for investors who need to honor redemption outflows from their clients, and thus must be removed or substantially increased with a shorter repatriation horizon, otherwise the effectiveness of the QFII channel would be significantly reduced