OJK Announces Gradual Implementation of Higher Free Float Requirements

Staged Approach to Enhance Market Liquidity

The Financial Services Authority (OJK) has announced plans to gradually increase the minimum free float requirement for companies listed on the Indonesia Stock Exchange (IDX) starting from 2026. According to Inarno Djajadi, Head of Capital Market, Derivative Finance, and Carbon Exchange Supervision at OJK, the adjustment will be implemented in a phased manner to allow companies sufficient time to prepare the necessary funding.

Rationale Behind the Gradual Implementation

Inarno explained that a sudden increase to the target level, potentially up to 30% free float, would be challenging for companies as higher free float requirements demand greater funding. The OJK's decision to implement the changes gradually reflects a balanced approach between enhancing market liquidity and minimizing disruption to listed companies.

Implications for Listed Companies and Market Dynamics

The planned increase in free float requirements is expected to enhance market liquidity and potentially attract more investors to the Indonesian capital market. However, companies will need to carefully plan their funding strategies to meet the new requirements. The OJK's phased implementation approach is designed to give companies sufficient time to adjust their capital structures accordingly.