MSCI Announces Latest Decision Following Review of Indonesia's Capital Market Reforms

MSCI has announced an update regarding the assessment of free float for Indonesian securities in its global indices, effective from 20 April 2026. This announcement follows the previous release on 27 January 2026, when it froze the rebalancing of its Indonesia indices.

“MSCI notes the capital market transparency reforms announced by the Financial Services Authority, Indonesia Stock Exchange, and Central Securities Depository Indonesia,” as quoted from the official announcement on its website, Tuesday (21/4/2026).

These reforms include increased transparency for shareholders holding more than 1% and more detailed investor classifications.

Additionally, the regulators have introduced a High Shareholding Concentration (HSC) framework and a roadmap to raise the minimum free float to 15%. MSCI is currently evaluating the scope, consistency, and effectiveness of these new policies in the context of determining free float and investment eligibility.

In the May 2026 index review, MSCI has decided to maintain the temporary policy that has been in place for Indonesian securities. This policy includes freezing increases in Foreign Inclusion Factors (FIF) and Number of Shares (NOS), and not adding new shares to the MSCI Investable Market Indexes (IMI).

MSCI will also not conduct upgrades between market capitalisation segments, including from small cap to standard. On the other hand, shares identified under the HSC framework by Indonesian authorities will be removed from the indices in accordance with MSCI’s global policies.

Furthermore, MSCI may use 1% shareholder disclosure data to adjust free float estimates if necessary. However, other new data will not be incorporated into index calculations until the evaluation process is complete and input from market participants has been considered.

This step is taken to limit index turnover and investability risks while allowing time for evaluating the newly implemented reforms. MSCI affirms that it will continue to coordinate with market participants and relevant authorities in Indonesia.

Looking ahead, MSCI is open to input from market participants regarding the effectiveness of the new policies. Further updates are expected to be provided in the Market Accessibility Review scheduled for June 2026.