Jakarta, October 2025 — The Financial Services Authority (OJK) is currently reviewing a policy proposal to increase the minimum public ownership (free float) requirement in Indonesia’s capital market. This initiative aims to strengthen market liquidity, transparency, and issuer credibility on the Indonesia Stock Exchange (IDX).
The proposal emerged after discussions with Commission XI of the House of Representatives (DPR RI), which encouraged a gradual increase in public share ownership to reach around 30–40%.
“If necessary, we should raise it to 40 percent to make the exchange more liquid and issuers more credible,” said Mukhamad Misbakhun, Chairman of Commission XI DPR RI, during a meeting with OJK on September 18, 2025 (Warta Ekonomi).
In response, Inarno Djajadi, Executive Head of Capital Market Supervision at OJK, expressed support but emphasized the need for a phased transition.
“Whether we agree or not, of course, we agree — but it must be gradual,” said Inarno (Warta Ekonomi, October 7, 2025).
Two Main Schemes: Existing Issuers and New IPOs
In its draft framework, OJK outlined two key policy directions:
- For existing listed issuers, the minimum public share ownership is planned to increase from 7.5% to 10% within the next three years, subject to periodic review.
- For new IPOs, the free-float threshold will be determined based on market capitalization rather than equity value—adopting practices from Malaysia, Singapore, and Hong Kong (CNBC Indonesia, September 25, 2025).
According to IndoPremier Research (2025), OJK’s simulation indicates that raising the minimum free float to 10% could add approximately IDR 36.6 trillion worth of new shares to the market. Further increases to 15–25% are still under study, balancing liquidity improvements against potential market stability risks.
A New Market Direction: Greater Liquidity, but More Selective
A minimum free-float policy of 40% could fundamentally reshape market dynamics. With more shares circulating among the public, market liquidity will rise. However, issuers with previously concentrated ownership structures will need to adapt.
For investors—especially long-term holders—this transition presents a double-edged sword: both opportunity and challenge.
Higher free float expands access for institutional and retail investors to high-quality stocks. Yet during the adjustment phase, short-term volatility may occur as valuations rebalance, particularly among issuers with dominant ownership structures.
Impact on Investment Strategies: Focus on Resilience
Under this new framework, liquidity-driven investment strategies alone are no longer sufficient. Investors must prioritize portfolio resilience—balancing risk profiles and incorporating instruments that can withstand market fluctuations.
One effective approach is optimizing investment through mutual funds, which offer the flexibility to adjust exposure between equities and bonds in line with market conditions. When volatility rises amid regulatory changes like free float adjustments, fund managers can reallocate a portion of assets to fixed-income instruments to maintain stability.
Mutual funds also enable individual investors to navigate turbulent markets more confidently. With experienced fund managers, asset allocation decisions are based on fundamentals and policy analysis, rather than short-term market sentiment.
Finding Opportunities Amid Reform
This policy sends a positive long-term signal. A more liquid and open market will improve price efficiency, corporate governance, and attract global investors. Still, both issuers and investors must adapt.
Investment approaches that previously relied on quick rotations may need to evolve toward value-driven, resilience-based strategies.
Investors who can read this market shift early stand to capitalize on the momentum—particularly through curated investment products that emphasize not just returns but also portfolio stability amid regulatory change.
Navigating Market Shifts with Curated Strategies from DBS Treasures
The free-float reform marks a turning point toward greater transparency and liquidity in Indonesia’s capital market. Amid this transformation, DBS Treasures priority banking serves as a trusted financial partner, helping you invest safely, intelligently, and sustainably. Together with experienced investment managers, DBS Treasures priority banking emphasizes strategies built on resilience, growth, and long-term financial serenity.
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Through the DBS digibank app, you can easily complete Single Investor Identification (SID) registration, execute buy/sell orders, or switch between mutual funds quickly and efficiently.
This investment solution is further supported by integrated Grow (investment) and Protect (insurance) solutions—allowing your portfolio to grow while staying protected from market uncertainty.
Adapting to changes like the free-float policy requires not only strategy but also a reliable financial partner who can turn market shifts into long-term opportunities.
Prepare your finances today through mutual fund investments with DBS Treasures priority banking, because in an ever-evolving market, resilience is the new liquidity. Click this page for more information.
