Jakarta. The Financial Services Authority (OJK) on Wednesday welcomed MSCI’s decision to maintain Indonesia's classification as an Emerging Market in its latest Market Classification Review, describing the outcome as recognition of ongoing efforts to strengthen the nation’s capital markets.

Hasan Fawzi, chief executive of capital market supervision at OJK, said the decision aligned with the expectations of regulators and market participants and should serve as momentum to accelerate reform initiatives already underway.

“For us, MSCI’s announcement is an opportunity to continue, strengthen, and accelerate the capital market reform agenda that we launched earlier this year,” Hasan said in a statement.

The decision follows months of scrutiny from international investors and index providers over issues including market transparency, free-float levels, and ownership concentration in Indonesian listed companies.

According to Hasan, MSCI acknowledged the progress made by Indonesian authorities in implementing reforms aimed at improving market accessibility and transparency.

“They recognized various reform initiatives and the progress of programs that we continue to strengthen going forward,” he said. “MSCI has also utilized the increasingly transparent data generated by our capital market reforms as a new source for its assessment.”

In its latest review, MSCI reaffirmed Indonesia’s status as an Emerging Market while noting improvements in market transparency and accessibility. The decision spared Indonesia from the prospect of a potential downgrade that some investors feared could have reduced the country's attractiveness to global funds tracking emerging-market benchmarks.

Indonesian authorities have introduced a series of reforms over the past year, including enhanced shareholder disclosure requirements, more detailed investor classification, stricter oversight of concentrated ownership structures, and plans to increase minimum free-float requirements.

Hasan said OJK has also intensified enforcement efforts. As of May 31, the regulator had imposed a total of Rp 138.9 billion ($7.8 million) in fines on 329 investors for administrative and capital-market violations.

According to Hasan, the recognition from MSCI follows similar assessments by other global index providers.

On April 7, FTSE Russell maintained Indonesia’s classification as a Secondary Emerging Market, placing it alongside major economies such as China and India. MSCI’s latest review further reinforced confidence in Indonesia’s capital market, he said, with the country receiving one of the strongest market-accessibility assessments among emerging markets in the region.

“We remain convinced that Indonesia’s capital market is highly attractive and offers strong prospects for both domestic and international investors,” Hasan said.

He cited Indonesia’s stable economic fundamentals, growing investor base, competitive equity valuations, and generally solid corporate earnings performance as key strengths supporting the market’s long-term appeal.