Jakarta. Indonesia’s financial regulator said a review by MSCI highlighted the need for continued reforms to improve transparency and market integrity, while reaffirming that most aspects of the country’s capital market accessibility remain unchanged.

The assessment comes after MSCI lowered Indonesia’s “Information Flow” rating in its 2026 Global Market Accessibility Review, citing concerns over limited visibility into share ownership structures and coordinated trading activity. The findings have intensified scrutiny of Southeast Asia’s largest economy at a time when its stock market has suffered one of the world’s steepest declines this year.

Hasan Fawzi, Executive Head of Capital Market, Financial Derivatives and Carbon Exchange Supervision at Indonesia’s Financial Services Authority (OJK), said MSCI’s review showed that the majority of Indonesia’s market accessibility indicators remained stable compared with last year.

Of the 18 criteria assessed across five market accessibility segments, 10 received MSCI’s highest “++” rating, indicating alignment with global best practices, while six retained a “+” rating, suggesting room for further improvement. Two indicators — Information Flow and Foreign Exchange Market Liberalization Level — remained in negative territory.

“We view MSCI’s feedback as part of a constructive evaluation process that is in line with the capital market reform agenda currently being implemented by OJK, the Indonesia Stock Exchange, KSEI, KPEI, and industry stakeholders,” Hasan said in a statement on Friday.

MSCI said the downgrade in Information Flow reflected insufficient transparency regarding beneficial ownership and trading activity, making it more difficult for investors to assess companies’ true free float and undermining efficient price formation.

The concerns were first raised in January, when MSCI warned that Indonesia could face a potential downgrade from emerging-market status if transparency issues were not addressed. While investors broadly expect Indonesia to retain its place in MSCI’s Emerging Markets Index, any downgrade could trigger billions of dollars in passive investment outflows.

Indonesia’s benchmark Jakarta Composite Index has fallen roughly 29% this year, making it the worst-performing major equity market globally. Foreign investors have recorded net sales of about $3.65 billion in Indonesian stocks amid concerns over governance, transparency, and broader economic policy.

In response, Indonesian authorities have rolled out a series of reforms aimed at strengthening market credibility. These include improving share ownership data, expanding beneficial ownership reporting requirements, enhancing market surveillance capabilities, strengthening disclosure standards, and updating regulations designed to improve transparency and investor protection.

Hasan said MSCI had acknowledged some progress, particularly in areas related to foreign exchange market accessibility, although further improvements are still needed.

OJK is also coordinating with Bank Indonesia and other authorities to ensure reforms support market development while remaining consistent with macroprudential policies and risk-management objectives, he added.

The regulator said global index providers, including MSCI and FTSE Russell, will continue gathering feedback from international investors, fund managers, brokers, and other market participants to assess the effectiveness of Indonesia’s reforms.

OJK maintained that Indonesia’s economic fundamentals remain strong and said ongoing engagement with global index providers would help ensure international investors fully understand the changes being implemented.

“With consistent reforms, we are optimistic that the quality and competitiveness of Indonesia’s capital market will continue to strengthen,” Hasan said.

Meanwhile, Chief Economic Affairs Minister Airlangga Hartarto said authorities would continue working with OJK and the Indonesia Stock Exchange to deepen reforms aimed at improving transparency and market integrity.

“We remain optimistic that Indonesia will stay on the emerging-market track, and the government is committed to completing this reform agenda to maintain investor confidence,” he said.

The minister added that authorities were also working to improve the availability of market information in English to make Indonesia’s capital markets more accessible to global investors.

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