Japan’s Topix stock index is poised for its biggest overhaul, with more than 600 companies — over a third of its constituents — likely to be gradually removed under new eligibility rules, according to analysts’ estimates.

Companies whose free-float market capitalization ranks in the bottom 3% of Tokyo Stock Exchange-listed firms in August will be phased out of the benchmark over two years beginning in October. That could trigger a scramble among smaller firms this month to avoid being selected for removal.

Ejection from the index would cut companies off from an estimated $1 trillion tracked by passive funds that follow the benchmark Topix, potentially weighing on their share prices. The overhaul addresses long-standing investor criticism that the benchmark includes too many small and illiquid stocks, making it costlier and more cumbersome to replicate.