OJK Prepares Risk Mitigation Related to MSCI Index Weighting

Jakarta (ANTARA) - The Financial Services Authority (OJK) states that it has prepared risk mitigation measures against Morgan Stanley Capital International’s (MSCI) decision on Indonesia’s index weighting. “As part of the mitigation, OJK has prepared measured and coordinated steps,” said the Executive Head of Capital Market, Derivatives Finance, and Carbon Exchange Supervision at OJK, Hasan Fawzi, during the March 2026 RDKB Press Conference in Jakarta on Monday. As an initial note, Hasan stated that OJK has completed the implementation of four main proposals submitted to MSCI. Although confident that the steps taken will restore the integrity of the domestic capital market, OJK still opens the possibility of risks from a decline in index weighting that could cause short-term consequences. OJK projects potential impacts including selling pressure due to portfolio adjustments by investors, potential capital outflows during the rebalancing period, and increased market volatility. However, OJK views these dynamics as transitional and temporary responses. “This is normal in the context of moving towards a higher quality market in the medium and long term,” Hasan said. As mitigation, OJK has encouraged the implementation of a minimum 15 percent free float policy. This policy will be carried out alongside strengthening the investor base, both domestic retail investors, domestic institutional investors, and foreign investors. On the other hand, communication with global index providers will continue intensively and constructively, including conveying developments in reform implementation up to the next evaluation. From the market stability side, OJK also emphasises that existing mechanisms will continue to be optimised, accompanied by routine and strict market monitoring. “The direction of this policy will continue to be carried out consistently, namely efforts to strengthen the quality and integrity of the Indonesian capital market fundamentally, to make it more transparent, liquid, credible, and able to grow healthily and sustainably in the medium to long term,” Hasan stated.