MSCI to Continue Monitoring Indonesian Capital Market Reforms Until November 2026
Global index provider Morgan Stanley Capital International (MSCI) has acknowledged the transparency reforms announced by the Financial Services Authority (OJK), the Indonesia Stock Exchange (BEI), and the Indonesia Central Securities Depository (KSEI).
These reforms include enhanced disclosure for shareholders with holdings exceeding 1 per cent, more detailed investor classification, the introduction of a High Shareholders Concentration (HSC) framework, and a roadmap to increase the minimum free float requirement to 15 per cent.
“While these announcements are a step in the right direction, what is crucial for international institutional investors is the consistent implementation and the sustained effect of these measures across the market,” stated the MSCI 202cap Market Classification Review, published on Wednesday, 24 June 2026.
Furthermore, MSCI indicated it will continue to evaluate the scope, consistency, and sustained effectiveness of the Indonesian capital market. This assessment, particularly regarding free float determination and broader investment eligibility, will remain under observation until the MSCI Index Review in November 2026.
“If adequate progress is not visible by the time of the MSCI Index Review in November 2026, MSCI will consider various options for the appropriate treatment of the Indonesian market, potentially including consultations regarding the reclassification of Indonesia from an Emerging Market to a Frontier Market,” the MSCI release continued.
According to MSCI, market participants in Indonesia have expressed deep concerns regarding investment eligibility stemming from issues of transparency, share ownership structures, and coordinated trading behaviour.
In its 2026 Market Classification Review released on Wednesday morning, Raman Aylur Subramanian, Head of Market Classification and Taxonomies at MSCI, provided various reviews of capital markets across several countries. The review also established the latest market classifications, categorising markets as Developed, Emerging, Frontier, or Standalone.
In its announcement, MSCI stated that there have been no changes to the classification of the Indonesian capital market, meaning it remains in the Emerging Market category.
“The MSCI Market Classification Framework determines whether a market is classified as developed, emerging, or frontier based on the actual accessibility and investability experienced by international institutional investors,” he said.