Indonesia stock exchange issues implementing rule for 15% free float policy

JAKARTA: Indonesia Stock Exchange (IDX) has issued an implementing rule for its 15% free float regulation, the exchange said in a statement, adding that it is effective from March 31.

Here are some key points:

IDX has raised the minimum free-float of shares, the amount of tradable shares of a company, to 15% from 7.5%.

The exchange gives listed companies a transition period to meet new minimum free‐float requirement, based on their market capitalisation as of March 31.

Companies with market capitalisation of at least five trillion rupiah and free-float of shares below 12.5% must raise their tradable shares to 12.5% by end-March 2027 and to 15% by end-March 2028, the statement said.

Companies with free float of shares between 12.5% to 15% must increase it into 15% by end-March 2027.

For listed companies with market capitalisation of below five trillion rupiah, they must meet the 15% free-float rule no later than March 31, 2029.

The exchange is giving listed companies more flexibility to meet minimum free-float requirements by allowing them to reclassify certain shareholders’ stakes as free-float shares.

The exchange also required companies that plan to do an initial public offering to list 15%, 20%, and 25% of their shares, depending on their market size.

IDX tightened the definition of free float where it excludes shares owned by affiliates of the controlling shareholder. Previously, the definition is only excluding stakes owned by the affiliates of the company.

It also added a definition that these are not shares whose transfer of ownership must be restricted.