Background
As a follow-up on the Action Plan for Accelerating the Reform of the Integrity of the Indonesian Capital Market, which aims to strengthen structural reforms and to ensure the market remains credible and investment-worthy, the Indonesia Stock Exchange (“IDX”) introduced significant changes through the issuance of:
-
New IDX Regulation No. I-A, which is attached to the IDX Board of Directors Decision No. Kep-00045/BEI/03-2026 dated 31 March 2026 on the Listing of Shares and Equity Securities Other than Shares that are Issued by Listed Companies (“New IDX Listing Rule”); and
-
Circular Letter No. SE-00004/BEI/03-2026 as a technical guideline (“IDX Circular Letter 04/2026”).
The New IDX Listing Rule replaces Regulation I-A, as attached to the IDX Board of Directors Decision No. KEP-00101/BEI/12-2021 on the Amendment of Regulation No. I-A on the Listing of Shares and Equity Securities Other than Shares Issued by Listed Companies (“Old Regulation I-A”) and IDX Board of Directors Decision No. Kep-00014/BEI/03-2022 on Special Policy on Free-Float Shares for Listed Companies Implementing Shares with Multiple Voting Rights.
Key Provisions
New Free Float Definition
The New IDX Listing Rule introduces a noteworthy criterion: only scripless shares listed on the IDX can be counted as free float, which was not stipulated in the Old Regulation I-A. Accordingly, free float shares are now defined as scripless shares listed on the IDX that are:
-
owned by shareholders holding less than 5% of the total listed shares;
-
not owned by a controlling shareholder and/or its affiliates;
-
not owned by any members of the board of directors or board of commissioners of the listed company;
-
not part of the treasury shares of the listed company; and
-
not subject to transfer restrictions.
The IDX Circular Letter 04/2026 further explains that the shares that are not subject to transfer restrictions, among other things, include:
-
shares that are currently subject to a restriction period on the transfer of share ownership, whether imposed by applicable regulations or as part of a corporate action of the listed company;
-
shares that are part of the portfolio of a venture capital company (VC) or private equity firm (PE); and/or
-
shares that are subject to asset seizure or blocking by law enforcement or other government authorities.
Given this narrower definition of free float shares, listed companies need to re-examine whether their shareholding composition complies with the new requirements.
Increased Free Float Shares Threshold to Maintain IDX Listing
Unlike the Old Regulation I-A which requires listed companies to maintain a minimum free float of 50 million shares and at least 7.5% of total listed shares in order to remain listed in IDX, the New IDX Listing Rule introduces stricter requirement by maintaining the same minimum number of shares but increasing the minimum free-float percentage to 15% of the total listed shares which should be achieved within one year of the listing date.
Moreover, listed companies must gradually meet the free float requirements based on market capitalization and free float shares levels, with mandatory phase deadlines over the next three years, as detailed below:
|
Market Capitalization
|
Free Float Level as of 31 March 2026
|
Required Free-Float Threshold
|
Compliance Deadline
|
|
Listed companies with market capitalization below IDR 5 trillion
|
Any level below 15%
|
Increased to at least 15%
|
31 March 2029
|
|
Listed companies with market capitalization of at least IDR 5 trillion
|
Between 12.5% and 15%
|
Increased to at least 15%
|
31 March 2027
|
|
Below 12.5%
|
Increased to at least 12.5%
|
31 March 2027
|
|
Increased to at least 15%
|
31 March 2028
|
It should be noted that the New IDX Listing Rule allows the IDX to retain discretion to determine a different compliance deadline in light of prevailing market conditions, subject to the prior approval or an instruction from the Financial Services Authority (Otoritas Jasa Keuangan or “OJK”). Non-compliance with the free float requirements may result in the imposition of sanctions, including supervision board listing (watch list), trading suspension, and ultimately delisting.
The higher ongoing free float threshold puts higher pressure on existing listed companies and increases the risk of IDX listing board reclassification where the relevant requirement is not fulfilled. In public M&A scenarios, it may affect listed companies in their evaluation of post-acquisition ownership structures and ongoing listing compliance. Listed companies should begin planning necessary actions at an early stage to comply with the new continuous free float requirements within the relevant phase deadlines.
Recalibration of Free Float Threshold for Initial Listing at IDX
Rather than using an equity-based approach as stipulated under the Old Regulation I-A, the New IDX Listing Rule introduces a market capitalization-based approach to determine the minimum free float percentage at the time of an initial listing. Market capitalization is determined by (i) multiplying the total number of listed shares by the Initial Public Offering (“IPO”) offer price for the prospective listed company and (ii) multiplying the total number of listed shares by its market price for the existing listed company. The new minimum free float requirements for the IDX Main Board and Development Board are as follows:
|
Initial Listing Free Float Requirements
|
Main Board
|
Development Board
|
|
Minimum number of free float shares
|
300 million
|
150 million
|
|
Market capitalization below IDR 5 trillion
|
25%
|
25%
|
|
Market capitalization of between IDR 5 trillion and IDR 50 trillion
|
20%
|
20%
|
|
Market capitalization above IDR 50 trillion
|
15%
|
15%
|
In addition, the IDX may determine a different minimum free float share for the companies that conduct IPOs to raise IDR 30 trillion or more. The prospective listed companies are also required to maintain the prescribed free float level for up to one year upon initial listing. Moreover, shares held by existing shareholders cannot be treated as free float at the time of the initial listing. However, such shares may be subsequently qualified as free float if they meet the applicable free float criteria for continuous listing on IDX.
By shifting to a market-capitalization-based approach, the free-float requirements better align with IPO pricing and offer size. Consequently, the prospective listed companies need to assess their free float compliance more carefully at the time of initial listing.
Eligibility of Free Float Shareholders
The New IDX Listing Rule continues to provide that a listed company may apply to the IDX for certain shareholders to be eligible as free float shareholders, provided that the relevant shares are held for public investors as the beneficial owners. Only parties holding less than 10% of the total listed shares may be proposed to the IDX for recognition as free float shareholders under this mechanism. The Circular Letter 04/2026 further clarifies that parties holding shares for public investors as the beneficial owners include the following categories:
-
Insurance companies, sharia insurance companies, reinsurance companies, or sharia reinsurance companies;
-
Pension funds;
-
Sovereign wealth funds established and/or owned by foreign governments;
-
Mutual funds;
-
Securities brokers;
-
Social security management companies; and/or
-
Other investment companies or portfolios proven to be beneficially owned by public investors.
12 Months Control-Retention Obligations for Controlling Shareholders
The New IDX Listing Rule requires any controlling shareholders of prospective listed companies to maintain their control and/or refrain from transferring some or all of their shares if such transfer would result in the loss of control for a period of at least 12 months after the initial IPO listing date or a different period as determined by the IDX. If a change of control is planned, as disclosed in the prospectus, the same control retention will also apply to the prospective new controlling shareholders.
The IDX Circular Letter 04/2026 further explains that such obligation applies only where the controlling shareholders hold 50% or less of the total shares at listing. If they hold more than 50%, transfer of shares is allowed provided that the controlling shareholders retain more than 50% following the transaction. This requirement is intended specifically to protect investors (primarily minority shareholders) and to acknowledge the strategic role of controlling shareholders in exits.
Positive Retained Earnings for Main Board Eligibility
The New IDX Listing Rule further tightens requirements for prospective listed companies seeking to list on the IDX Main Board by requiring them to record a positive profit balance in their most recent financial statements submitted at the same time as their listing applications. This requirement aims to ensure that the IDX Main Board is reserved for companies with a proven track record of profitability and financial stability. In this regard, other companies still seeking sustained profitability may consider the IDX Development Board as an alternative.
Mandatory Certified Financial Statement Personnel
The New IDX Listing Rule requires all listed companies (including prospective listed companies) to ensure that their financial statements are prepared by qualified professionals. This requirement takes effect on 31 March 2027. In this regard, a listed company must satisfy one of the following options:
-
The company shall employ at least one officer responsible for the preparation of its financial statements, who is either a director or an employee holding a valid accounting competency certificate (CA and/or CPA) issued by a professional organization recognized within Indonesia or internationally; or
-
The company shall appoint a practicing accountant or public accountant to prepare its financial statements if it does not have an internal officer fulfilling the above requirements.
Continuing Education for the Board of Directors, Board of Commissioners, and Audit Committee Members
The New IDX Rule requires both existing and prospective listed companies to participate in and complete continuing education programs on capital markets and corporate governance. This requirement will take effect once IDX issues a circular letter on continuing education. As such, listed companies need to closely monitor for the issuance of the IDX circular letter.
Transitional Provision
Any listing applications submitted by private companies prior to 31 March 2026 will continue to be evaluated by the IDX in accordance with the requirements set out under Old Regulation I-A.
Conclusion
The New IDX Listing Rule marks IDX’s significant efforts to bolster long-term global investor confidence and strengthen the position of leading Indonesian stocks within international index constituents. That said, the IDX emphasized that the transition will be gradual, with consultation processes and dedicated support mechanisms, including helpdesk services, to assist issuers in meeting the new requirements.
In light of the New IDX Listing Rule and Circular Letter 04/2026, companies should proactively assess their free float compliance, financial reporting practices, and governance training programs to align them with the new requirements. Early compliance is advisable to mitigate the risk of sanctions and support a smooth listing or continuous listing process.
