Indonesia Tightens Free Float Rule: OJK, IDX Set 15% Minimum
00:00
00:00
- OJK and IDX plan to lift the minimum free float requirement to 15% from February 2026, up from 7.5%.
- Mahendra Siregar said issuers that fail to comply could face an exit policy, and the rule applies to all listed firms and IPO candidates.
- The move follows investor scrutiny and MSCI consultation results, including concerns about the accuracy of shareholder classification data.
Indonesia’s Financial Services Authority (OJK) and the Indonesia Stock Exchange (IDX) are set to adjust the minimum free float requirement for listed companies to 15 percent, up from 7.5 percent, with the new rule targeted to take effect in February 2026.
OJK Chairman Mahendra Siregar said the policy would be implemented under clear transparency principles for issuers, including a defined timeframe for compliance.
“SRO will issue a rule for a minimum 15 percent free float in the near term, with good transparency and for issuers within a certain period,” Mahendra said during a press conference at the IDX building in Jakarta on Thursday.
Mahendra stressed that issuers unable to meet the minimum free float requirement would face an exit policy.
He also underlined that the free float rule would apply to all issuers in Indonesia’s capital market, both existing listed firms and companies planning to conduct an initial public offering (IPO).
“But the essence is that the 15 percent applies across the board,” Mahendra said.
He added that the adjustment process would be carried through to completion, including addressing feedback from Morgan Stanley Capital International (MSCI).
“Whatever MSCI’s response, if needed it will be implemented to the final stage so it is accepted as intended by MSCI,” Mahendra said.
Regarding additional information requested by MSCI—particularly the potential disclosure of share ownership below 5 percent, along with investor categories and ownership structures—OJK said it was committed to aligning with international best practices.
“On ownership, we are committed to doing it in line with international best practice. We will do it and ensure it is fulfilled accordingly,” Mahendra said.
MSCI has previously announced the outcome of a global consultation related to its evaluation of the free float of Indonesian stocks, drawing immediate attention from market participants.
The issue has become a major focus for market players, particularly global investors who have long expected improved accessibility in the domestic capital market.
During the consultation process, some international investors welcomed the proposed use of KSEI’s Monthly Ownership Composition Report as an additional reference.
However, most investors still expressed significant concerns about the accuracy of shareholder classification.
Investors argued that the data did not fully reflect the actual ownership structure, raising doubts about assessing Indonesia’s free float levels objectively.
Free float refers to the portion of a company’s shares that is available for public trading. Indonesia currently applies a 7.5 percent free float requirement for listed issuers.
Indonesianpost.com | Antara
