AEI Calls for Gradual 15% Free Float Rollout as OJK Presses Market Reform

JAKARTA, Investortrust.id — The Indonesian capital market entered a critical adjustment phase this week as the Indonesian Issuers Association urged regulators to apply the new 15% minimum free float requirement gradually, even as authorities confirmed the rule would apply immediately to new listings as part of a wider shock reform agenda.

Indonesia Issuers Association (AEI) chairman Armand Wahyudi Hartono said the increase from the current 7.5% minimum should be phased in to reflect market conditions and issuer readiness.

“From a preparedness standpoint, when increasing free float, our input is that it should be done step by step,” Armand told reporters at the Indonesia Stock Exchange on Wednesday, Feb 4, 2026.

He said issuers need flexibility to test market demand before releasing larger portions of shares to the public.

“So it is marketed more broadly, you try selling first, start with a certain portion, then see whether it is absorbed or not,” he said. “If it turns out there is a specific strategy, it must be done in line with market demand.”

The proposal comes as the Indonesia Stock Exchange and the Financial Services Authority prepare to formally raise the free float threshold to 15%, a key pillar of Indonesia eight-point capital market integrity reform program.

Under the plan, the 15% requirement will apply from the outset to companies conducting an initial public offering, while listed issuers will be given a transition period through a staging mechanism.

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Acting Chief Executive for Capital Markets, Derivatives Finance, and Carbon Exchange at OJK Hasan Fawzi confirmed that the higher free float would be mandatory for new IPOs starting February or March 2026.

“If that becomes a consequence, then we will implement it,” Hasan said on Tuesday, Feb 3, 2026. “Because the obligation to meet the free float requirement, if seen in exchange regulations, will likely be applied from the beginning for new IPOs.”

Hasan acknowledged the policy could lead some companies to reconsider listing plans but said OJK expects higher-quality issuers to proceed.

“We hope companies will actually welcome this positively,” he said.

Regulators framed the policy not as a numerical target but as a structural reform aimed at strengthening market integrity after sharp swings in the Jakarta Composite Index and concerns raised by global index providers.

Hasan said the short-term impact may include fewer listings but argued the long-term payoff would be a more attractive and credible market.

“We believe all of this may occur only in the short term,” he said. “In the long-term horizon, we expect the market to become far more attractive and much stronger than before.”

The push is closely linked to feedback from MSCI, which has repeatedly flagged transparency, liquidity, and ownership concentration in Indonesia equities.

Acting Chair of the OJK Board of Commissioners Friderica Widyasari Dewi said the free float increase is one of eight priority actions to restore confidence.

“We have asked the self-regulatory organizations, both at the exchange and KSEI, to increase the free float threshold to 15%,” Friderica said at a market dialogue on Sunday, Feb 1, 2026. “The provisions are being adjusted and are currently in progress.”

For companies already listed, Friderica said implementation would be gradual.

“For listed issuers, the increase will be carried out in stages,” she said. “The mechanism will be communicated further to market participants.”

She added that the reform package also includes more granular investor classification and improved ownership data disclosure.

“Our hope is that this will strengthen transparency, data credibility, and ownership information in Indonesia capital markets,” Friderica said.

Armand said AEI supports the reform direction but stressed the need for close coordination between issuers and the exchange.

“If it is done together, it must be coordinated with the exchange,” he said. “If it goes up little by little, that is fine. We will wait for the final regulation.”

With nearly 1,000 listed companies on the exchange, Armand said time and market conditions would be decisive factors in absorbing the higher public ownership requirement.

“In my view, it simply takes time,” he said. “It takes time and depends on market conditions.”

For regulators, however, the message is clear. The higher free float is no longer optional but a cornerstone of Indonesia effort to reset market credibility, even if it means short-term adjustment pain.

As Hasan put it, “Encouraging a larger free float is a shared objective of stock exchanges worldwide, especially major exchanges, including the Indonesia Stock Exchange.”