Strengthen the Capital Market, OJK Will Set a Minimum Free Float of 15 Percent

Illustration. (Photo: Dok. Antara)

JAKARTA - The Financial Services Authority (OJK) plans to raise the free float share provision to a minimum of 15 percent from the previous 7.5 percent in the near future.

Chairman of the OJK Commission Board Mahendra Siregar said that the increase in the free float limit was in line with the standards applied in various international exchanges and would be implemented by prioritizing transparency.

"SRO (Self Regulatory Organizations) will issue rules for a minimum free float of 15 percent which will be carried out in the near future and with good transparency," he said in a press conference, Thursday, January 29.

Mahendra emphasized that issuers who are unable to meet the provisions within the specified period will be subject to an exit policy through a measurable and accountable supervision mechanism.

"For issuers or public companies that in a certain period of time are determined later in the regulation cannot fulfill it, then an exit policy will be given through a good supervision process," he said.

However, Mahendra emphasized that he could not detail the form of the exit policy that would be implemented in the future.

He added that this policy is part of OJK's response to MSCI's request emphasizing the importance of transparency in calculating free float shares in Indonesia.

In addition, Mahendra stated that OJK is committed to fulfilling MSCI's additional requests regarding the provision of information on share ownership below 5 percent which is equipped with investor categories as well as its ownership structure.

"We commit to doing it according to international best practices. So this is an additional request," he said.

According to Mahendra, the improvement of this policy is expected to increase the transparency of the capital market while ensuring the comparability of Indonesian data with global market standards.