Jakarta. Indonesia’s financial regulator on Monday outlined a series of market reforms aimed at addressing concerns raised by MSCI, as authorities sought to reassure investors following a sharp sell-off in local equities.

Financial Services Authority (OJK) Acting Chairwoman Friderica Widyasari Dewi said all of MSCI’s concerns had been formally submitted in proposal form, but the index provider had made clear that execution, not intent, would be decisive.

“Everything requested by MSCI has been laid out in our proposals. But they are not looking for plans alone; they want to see concrete implementation of the action plan,” Friderica told reporters at the Indonesia Stock Exchange on Monday.

OJK told MSCI it had committed to three key measures to improve transparency and market quality:

First, Indonesia plans to expand disclosure of share ownership below the current 5% threshold. Under the proposal, listed companies would disclose ownership stakes starting from above 1%, providing more transparent information to the public and regulators. Friderica said the rule could be implemented as early as this month.

“Ownership data that was previously disclosed only above the 5% level will now be visible from 1%,” she said.

The policy is expected to improve data quality, narrow the scope for irregular trading practices, and strengthen confidence among global investors.

Second, OJK is also finalizing regulations to raise the minimum free float requirement for listed companies to 15% from 7.5%, a reform designed to deepen liquidity and align Indonesia more closely with MSCI’s market standards.

“We are targeting the free float regulation to be issued in March,” Friderica said, adding that the timeline was firm. The change could prompt corporate actions among companies with low public ownership, including divestments or secondary share offerings.

Third, OJK is working to improve the granularity of market data, another area flagged by MSCI, covering transaction statistics, order fragmentation and ownership categorization. Friderica said these upgrades were also expected to be completed by March.

The Indonesian Central Securities Depository (KSEI) will broaden its investor classification framework from nine categories to 27 subcategories, a move intended to improve clarity around beneficial ownership and align local practices more closely with international standards.

“The discussion went very well,” according to Hasan Fawzi, an OJK commissioner overseeing capital market, after the meeting. “MSCI even opened the door to providing technical guidance on its assessment methodology, which shows alignment with the direction of our reforms.”

The talks came as Indonesia’s benchmark Jakarta Composite Index (JCI) remained under pressure, falling 4.88% on Monday to close at 7,922.73 after a wave of sell-offs last week erased about 7% of market capitalization. OJK said the recent weakness reflected portfolio rebalancing by investors rather than a deterioration in market fundamentals.

Friderica said investors were trimming exposure to stocks that had previously posted sharp gains and were seen as fully valued, a common risk-management strategy after a strong rally.

“Most of the stocks that declined today are those whose prices had risen too far,” she said, adding that the correction should be viewed as temporary.

She said some fundamentally strong stocks continued to rise, indicating that investors were becoming more selective. Foreign investors, after four consecutive sessions of net selling, returned as net buyers on Monday with inflows of Rp 654.9 billion ($42 million), a development OJK described as encouraging amid volatility.

Regional factors also weighed on sentiment, with major Asian indices, including South Korea’s Kospi, posting steep losses. Gold prices weakened as well.

OJK urged investors to remain calm and focus on medium- to long-term prospects, stressing that it would continue to ensure trading remains orderly, fair and efficient. Friderica said the regulator would maintain close communication with MSCI, alongside the IDX, KPEI, KSEI and sovereign wealth fund Danantara, to strengthen the credibility and competitiveness of Indonesia’s capital market.

MSCI has previously flagged issues related to market accessibility, transparency and free float levels in Indonesia. Authorities hope the latest commitments will address those concerns ahead of MSCI’s next market classification review.

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