UPDATE 1 — Turkish stocks drop more than 3% after MSCI freezes certain index changes

MSCI freeze takes effect immediately and remains in place until further notice MSCI could consult on downgrading Turkey if progress is insufficient by June 2027 Finance Minister Simsek says regulators are implementing measures to boost market transparency (Adds finance minister's comments in paragraphs 2, 10-12) By Daren Butler and Canan Sevgili ISTANBUL, Oct 16 (Reuters) — Turkey's main stock index slid more than 3% on Friday after global index provider MSCI froze certain changes to its Turkey equity indexes, saying it needed more time to assess market reforms and warned of a potential downgrade if sufficient progress was not made by mid-2027. In subsequent comments, Turkish Finance Minister Mehmet Simsek said "important regulations are being implemented by relevant institutions to enhance transparency in capital markets and strengthen investor confidence." The MSCI move came amid a crisis in Turkey's investment fund industry after regulators last month ordered the liquidation of 131 funds that had reached more than $20 billion in assets over just three years. The crisis dragged stocks into a bear market, with the main index having its worst month since 2008 in September. The benc