The Financial Services Authority (OJK) unveiled a “bold and ambitious” package of capital market reforms.

The announcement follows the resignation of senior officials amid a week of severe market turbulence.

According to the Jakarta Globe, OJK’s acting head, Friderica Widyasari, said the reforms focus on four areas: minimum free-float requirements, transparency of share ownership, trading governance, and law enforcement.

The measures aim to strengthen the integrity and competitiveness of Indonesia’s capital market. They also seek to align it with global standards and the expectations of international index providers.

Friderica said the reform agenda was developed with self-regulatory organisations (SROs) to restore credibility after recent volatility.

“OJK, together with the SROs, is committed to implementing bold and ambitious reforms in Indonesia’s capital market, in line with best practices and global expectations,”

she said at a meeting with market participants and regulators at the Indonesia Stock Exchange (IDX).

A key measure will raise the minimum free-float requirement for listed companies from 7.5% to 15%. Existing companies will have a phased transition.

New issuers must meet the higher threshold at the time of their initial public offerings.

OJK also plans to improve transparency around Ultimate Beneficial Ownership (UBO). The Central Securities Depository (KSEI) will publish more detailed shareholding data via the IDX.

Other reforms include completing the demutualisation of the IDX and strengthening law enforcement against market manipulation.

Governance standards for listed companies will also be enhanced. This includes mandatory continuing education for directors, commissioners, and audit committee members.

Friderica stressed the need for collaboration.

“We cannot work alone. Synergy with the government, SROs, industry players, and all stakeholders will continue to be strengthened to ensure these reforms are carried out in a sustainable manner.”

The announcement comes after Indonesia’s benchmark index fell nearly 7%, erasing around Rp 1,198 trillionin market capitalisation.

The decline followed MSCI Inc’s concerns over limited transparency and potential coordinated trading.

Featured image credit: Edited by Fintech News Indonesia, based on image by freepik