Consider the following statements regarding MSCI's classification of equity markets and the criteria it uses to assign market status:

Statements

1. MSCI classifies equity markets into four tiers — developed, emerging, frontier, and standalone — based on factors such as market accessibility, scale of the stock exchange, and the liquidity and frequency of stock trading.
2. Free float in equity markets refers to the proportion of a company's shares that are genuinely available for public trading, and opaque shareholding structures can make the actual tradable pool substantially smaller than reported figures suggest.
3. Passive investors who track an index are required by regulation to hold a minimum percentage of each country in that index, which is why a downgrade in index classification has no immediate effect on portfolio flows until officially confirmed.