OJK Plans Gradual Free Float Increase Starting at 10 Percent
Key Takeaways
|
UBUD, BALI, Investortrust.id — THe Financial Services Authority, or OJK, signals a phased increase in the minimum free float for listed companies starting on Saturday Nov 15 2025 as the regulator moves to align Indonesia’s capital market with global liquidity standards.
The plan raises the minimum portion of publicly tradable shares from the current 7.5 percent to a first stage of 10 percent for companies preparing an initial public offering.
The Financial Services Authority or Otoritas Jasa Keuangan said the step is intended to strengthen market depth and reduce the dominance of controlling shareholders in daily trading.
Free float refers to the portion of shares that circulate in the market and are freely tradable by the public. These do not include ownership held by controlling shareholders, corporate insiders, government entities, or other strategic holders that typically maintain long-term positions.
Inarno Djajadi who serves as Chief Executive for Capital Market Supervision for Derivatives and Carbon Exchanges said the long-term target remains 25 percent. He added that the transition must be gradual to avoid disruption to market participants.
He said the 10 percent requirement is expected to apply to companies seeking to list on the Indonesia Stock Exchange. He also noted that subsequent stages of 15 percent and eventually 25 percent have been outlined to ensure an orderly migration.
Inarno said the authority will first prioritize the higher threshold for new IPO candidates. He added that the measure will eventually shape a healthier market structure with more tradable shares and better price discovery.
The proposal is not new. Members of Commission XI of the House had previously suggested raising the minimum free float to 30 percent which they argued would strengthen transparency.
Indonesia Stock Exchange Listing Director I Gede Nyoman Yetna said the bourse continued to review the relevance of its listing rules. He added that all adjustments including those tied to free float must balance market conditions and the capacity of listed companies and investors.
He said the exchange had been monitoring global market practices to ensure Indonesia remains competitive while maintaining stability within its domestic investor base.