MSCI to Continue Monitoring Indonesian Capital Market Reforms Until November 2026

MSCI has acknowledged the transparency reforms announced by Indonesia’s Financial Services Authority (OJK), the Indonesia Stock Exchange (BEI), and the Indonesian Central Securities Depository (KSEI). These reforms include enhanced disclosure of shareholders with ownership above 1 percent, more detailed investor classifications, the introduction of a High Shareholders Concentration (HSC) framework, and a roadmap to increase the minimum free float requirement to 15 percent. “While these announcements are a step in the right direction, what matters most to international institutional investors is the consistent implementation and sustained effect of these measures across the market,” MSCI stated in its Market Classification Review 2026. MSCI added that it will continue to assess the scope, consistency, and ongoing effectiveness of Indonesia’s capital market, particularly regarding free float determination and broader investability, which will remain under review until the November 2026 MSCI Index Review. “If sufficient progress is not evident by the November 2026 MSCI Index Review, MSCI will consider various options for the appropriate treatment of the Indonesian market, potentially including a consultation on reclassification from Emerging Market to Frontier Markets,” the release stated. For Indonesia, MSCI noted that market participants have expressed deep concerns about investability stemming from transparency issues, as well as shareholding structures and coordinated trading behaviour. In its latest Market Classification Review, Head of Market Classification and Taxonomies Raman Aylur Subramanian confirmed no changes to Indonesia’s market classification, which remains an Emerging Market. “The MSCI Market Classification Framework determines whether a market is classified as Developed, Emerging, or Frontier based on the accessibility and investability actually experienced by international institutional investors,” he said.