Indonesia Bourse to Implement 15% Free Float Requirement
The Indonesia Stock Exchange will gradually raise the minimum free float for companies to 15 percent. Firms may be grouped by readiness to ensure compliance.
The Indonesia Stock Exchange (IDX) is set to implement a phased requirement for listed companies to double their minimum free float to 15%. This move, aimed at increasing the volume of freely tradable stocks, represents a significant step in the nation's ongoing capital market reforms.
Jeffrey Hendrik, the interim chief executive of the bourse, noted that companies may be divided into batches based on their readiness to comply. Under this proposal, each batch would be granted a one-year period to reach the mandatory 15% threshold. Hendrik emphasized that while the plan is being finalized, it remains subject to official approval by the Financial Services Authority.
"The bourse may divide companies into batches according to their readiness to offer more stocks, giving each batch a year to comply with the minimum free float level."
These measures follow a warning from MSCI Inc. earlier this year, which suggested that the country could be downgraded to frontier market status as early as May. The warning cited concerns regarding limited market transparency and the potential for price manipulation. In response, Indonesian authorities have pledged a series of reforms to strengthen market integrity and maintain its emerging market classification.
