Indonesia’s New Stock Market Rules Raise Compliance Bar, Sparking Delisting Concerns

JAKARTA – New listing regulations that took effect earlier this year are creating a significant compliance challenge for a large portion of companies on the Indonesia Stock Exchange (IDX). The rules, which are being phased in, most notably double the minimum percentage of shares that must be freely available for public trading, prompting concerns that some firms may choose to delist rather than meet the stricter standards.

Stricter Free-Float Requirements

Under the amended IDX Regulation No. I-A, which became effective on March 31, 2026, the minimum free-float requirement for continued listing has been raised from 7.5% to 15% of a company’s total listed shares. [4, 23] The regulation also clarifies the definition of “free-float shares” as those held by public shareholders owning less than 5% of total shares, excluding holdings by controllers, their affiliates, and company management. [2, 3]

The reforms were introduced after index provider MSCI warned of a potential downgrade of Indonesia from an emerging to a frontier market, citing concerns over insufficient free floats and opaque ownership structures. [4, 6, 11] The changes are part of a broader effort by the IDX and Indonesia’s Financial Services Authority (OJK) to improve market quality, enhance investor protection, and align with international standards. [5, 7, 23]

A Phased Transition and Market Impact

The IDX has established a transitional period for existing companies to comply with the 15% threshold. The deadline depends on a company’s market capitalization as of March 31, 2026, with compliance staggered over the next two to three years, into 2028 and 2029. [4, 11]

The new rule presents a substantial hurdle for many. According to IDX data from May 2026, only 566 of the 956 companies listed at the end of March met the new 15% free-float requirement. [6] This indicates that hundreds of firms will need to issue new shares, or major shareholders will have to sell down their stakes, to remain compliant.

Analysts have noted that the reforms could lead to an increase in corporate actions like rights issues and secondary placements. [4] However, they also warn that some companies, particularly those tightly controlled by families or parent corporations, may find compliance too difficult or undesirable and opt to go private. [6] Non-compliance could result in sanctions ranging from inclusion on a watchlist to trading suspension and eventual delisting. [4]

The push for greater liquidity and transparency has already had repercussions. In June 2026, global index provider FTSE Russell removed eight Indonesian stocks from its Global Equity Index Series, citing reasons such as high shareholding concentration and failure to meet surveillance screening requirements. [18] This followed MSCI’s removal of several Indonesian stocks from its indices effective June 1, 2026. [21]

Sources

• Amendment of IDX Regulation No. IA (Vol.1): updated free float requirements
• IDX-new-free-float-rules-key-changes-and-practical-insights
• New IDX Listing Rules: Free Float & Governance Changes
• Indonesia stock market reforms could prompt delistings
• Indonesia Listing Reform 2026: Key Changes to Free Float and Governance Requirements
• Indonesia Overhauls Listing Requirements under Regulation I-A: Increased Free Float, New Eligibility Metrics, and Governance Enhancements
• IDX’s Reform of Listing Rules: Stricter Free Float Share Pool and Other Key Changes
• Indonesia Strengthens Capital Market Reform and Investor Protection with Updated Listing Regulation Number I-A
• 8 Indonesian Stocks Removed From FTSE Russell Index: What It Means for Investors
• MSCI removes 19 Indonesian stocks, leaving PT Sumber Alfaria Trijaya Tbk as sole Indonesian in Global Small Cap Index

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