Jakarta. Indonesia Stock Exchange (IDX) is ready to implement a possible adjustment to the minimum free float requirement, a policy currently under review with the Financial Services Authority (OJK) and the Indonesian Issuers Association (AEI). The plan is expected to be discussed in Parliament in the fourth quarter of 2025.

Free float refers to the portion of a company’s shares available for public trading on the open market, excluding holdings by founders, directors, commissioners, or controlling shareholders. Stocks with a larger free float tend to offer higher liquidity but may move more slowly, while those with smaller free float are typically more volatile and riskier for investors. House of Representatives (DPR) Commission XI Chairman Mukhamad Misbakhun earlier proposed lifting the minimum public float from the current 7.5–15 percent range to 30 percent. He argued that Indonesia’s low free float ratio limits trading activity and dampens investor interest.

IDX Director of Corporate Valuation I Gede Nyoman Yetna said the exchange has conducted extensive studies and simulations to ensure the new policy will not pressure the market, particularly small-cap issuers.

“We’re not only focusing on the minimum requirement itself but also encouraging more large-scale IPOs so that the total free float capitalization in IDX continues to grow,” Nyoman said on Monday.

According to him, the policy design will consider two main factors: the financial health of listed companies and the capacity of investors to absorb additional shares in circulation. Balancing these elements, he said, is crucial for maintaining market stability and liquidity.

Nyoman said that any policy change would involve consultations with stakeholders and benchmarking against international market practices. IDX and OJK are preparing several scenarios to measure the impact of raising the free float threshold on issuers and investor liquidity.

“These simulations will help us determine an ideal adjustment level and a reasonable transition period so that companies are not burdened,” he added.

IDX is also developing a medium-term strategy to gradually boost free float levels in the domestic capital market. This includes education initiatives, compliance supervision, and incentives for issuers that proactively expand their public shareholding.

Ongoing measures by the bourse include:

• Holding regular seminars and outreach programs on free float importance and corporate action options.
• Conducting periodic compliance checks and imposing sanctions on companies failing to meet minimum thresholds.
• Assigning a special “X” notation and placing low-free-float issuers (below 5 percent) on the special monitoring board.
• Requiring consistent reporting of free float data.

Currently, several issuers still have a free float below 7.5 percent, contributing to thin trading volumes and share prices that do not reflect true fundamentals. IDX aims to create a more efficient and attractive market structure for both domestic and foreign investors through the upcoming adjustment.

“Enhancing free float is not just about liquidity, it’s about strengthening the competitiveness of Indonesia’s capital market on the global stage,” Nyoman said.

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