July 21 (Reuters) - Global index provider MSCI ( MSCI ) said

on Tuesday it will temporarily cap the weight of any single

issuer in its MSCI USA Enhanced Value Index at 25% to address

potential concentration risks.

The exceptional issuer cap, to be reviewed monthly, will

take effect from September 1.

The move comes as a rally in a handful of U.S. mega-cap

stocks has increased concentration in equity indexes, raising

concerns over investors' exposure to a small number of

companies.

MSCI's ( MSCI ) stock market indices serve as benchmarks for

‌trillions of dollars in assets held by investment ​funds,

pension plans, and asset managers to measure performance and

guide investment decisions.

Under the rule, if the combined weight of securities from a

single issuer exceeds 25% on a given day, MSCI ( MSCI ) will reduce that

issuer's weight to 20% and redistribute the excess weight

proportionately among the remaining issuers in the index.

MSCI ( MSCI ) said it is reviewing concentration levels across its

Enhanced Value indexes and will soon launch a public

consultation with methodology enhancement proposals to address

the issue.