07 May 2026
Indonesia Overhauls Listing Requirements under Regulation I-A: Increased Free Float, New Eligibility Metrics, and Governance Enhancements

Indonesia’s capital markets have faced intensifying scrutiny from global investor scrutiny, most visibly following MSCI’s recent decision. In response, as part of broader efforts to align Indonesia’s capital markets with international standards, the Indonesia Stock Exchange (“IDX”) has moved decisively through Decree No. Kep-00045/BEI/03-2026, it has issued a significant update to Regulation No. I-A on the Listing of Shares and Equity Securities Other than Shares, which came into force on 31 March 2026.

This revised framework supersedes Regulation I-A under Kep-00101/BEI/12-2021 and introduces material changes across three fronts: market quality, investor protection, and corporate governance. The key updates are set out below.
 

1. Significant Changes on the Indonesian Capital Markets 
    

   1. Increased Free Float Regime for Prospective and Existing Listed Companies

   One of the most consequential changes under the new regulation is the tightening of free float requirements, applicable both at the IPO stage and on an ongoing basis. Notably, the regulation now expressly excludes shares subject to transfer restrictions from the free float calculation. This clarification brings greater certainty to how free float is determined in practice.

Minimum Free Float Requirements for Prospective Listed Companies

The previous framework set minimum free float thresholds by reference to pre-IPO equity: at least 20% for companies with equity below IDR 500 billion, 15% for those between IDR 500 billion and IDR 2 trillion, and 10% for those exceeding IDR 2 trillion. The revised regulation raises and recalibrates these thresholds by reference to market capitalization instead: 25% for companies with market capitalization of up to IDR 5 trillion, 20% for those between IDR 5 trillion and IDR 50 trillion, and 15% for those above IDR 50 trillion. For IPOs with fundraising proceeds of at least IDR 30 trillion, the IDX retains discretion to determine a different minimum free float.

The regulation further introduces the following clarifications on the calculation and maintenance of free float:

1. for IPOs, excludes shares held by pre-IPO shareholders are excluded from the free float calculation;

2. for prospective listed companies originating from an existing public company, the calculation is based on shares held prior to listing; and

3. the minimum free float requirement must be maintained for at least one year from the listing date.

Minimum Free Float Shares Requirements for Existing Listed Companies

Under the previous framework, listed companies were required to maintain a minimum free float of 7.5% of total issued shares, with at least 50 million shares held by the public. The revised regulation doubles this threshold to 15%, while the minimum number of publicly held shares remains unchanged. To facilitate an orderly transition, the IDX has established a phased implementation timeline:

1. companies with a market capitalization of IDR 5 trillion or more must achieve 12.5% free float by 31 March 2027 and 15% by 31 March 2028; and

2. companies with a market capitalization of below IDR 5 trillion must achieve 15% free float by 31 March 2029.

This phased approach provides issuers with additional time to adjust their shareholder composition while supporting a more orderly transition toward higher market liquidity.  
 

Shift from Equity-Based to Market Capitalization-Based Thresholds

The new regulation fundamentally reorients the basis for determining minimum free float requirements at initial listing, from pre-IPO equity levels to pre-listing market capitalization. The revised thresholds are set out in the comparison below.
 

2. Removal of Restrictions on Stocks Splits 

   Under the previous regulation, listed companies were prohibited from conducting a stock split or reverse stock split for at least 12 months following (i) their initial listing on the IDX, or (ii) the most recent stock split or reverse stock split.

    

   The revised regulation removes this restriction, giving listed companies with greater flexibility to manage their share price range and, potentially, improved trading liquidity in the secondary market. Any such action remains subject to prevailing regulatory and disclosure requirements.

    

3. Introduction of Lock-Up Requirement as a Strengthened Supervision over Controlling Shareholders 

   The new regulation expressly requires controlling shareholders to retain their shareholding and/or restrict shares transfers for at least 12 months following listing, or for a longer period as the IDX may determine. This requirement was previously implemented as a matter of unwritten OJK/IDX policy.

    

   In practice, such arrangements have already been commonly implemented in capital markets transactions through contractual lock-up arrangements. The inclusion of this provision in the regulation formalizes existing market practice and provides clearer regulatory basis to support post-listing stability and alignment between controlling shareholders and public investors.

2. Financial Reporting Standards and Competency Requirements

   
   1. Positive Retained Earnings as the Financial Requirement for Main Board Listing

   Companies seeking Main Board listing are now required to demonstrate positive retained earnings in their latest financial statements submitted with the listing application. This requirement did not exist under the previous regulation and reflects IDX’s intention to set stricter financial thresholds, placing greater emphasis on an issuer’s financial capability and sustainability track record.

   
   2. Enhanced Financial Reporting Competency Requirements
   The new regulation introduces additional requirements to strengthen the quality and reliability of financial reporting. A listing applicant must now either:

   1. have at least one individual responsible for financial reporting who holds a recognized accounting certification; or

   2. appoint a licensed public accountant or practicing accountant.

   These requirements apply not only to both prospective listed companies seeking admission on the Main Board or Development Board, and to existing listed companies in maintaining their ongoing financial reporting standards. In practice, this change is expected to raise the credibility and consistency of financial disclosures, while requiring issuers to ensure adequate internal expertise or external support in preparing financial statements.

    

3. Governance and Disclosure Enhancements Aspects

   1. Mandatory Continuing Education for Board and Governance Bodies
   The new regulation requires members of the Board of Directors, Board of Commissioners, and Audit Committee to complete continuing education programs on capital markets and corporate governance. The requirement is directed at ensuring that company leadership is adequately equipped to meet the standards expected of a listed company environment.

   2. Enhanced Accountability for Disclosures

   The revised regulation places explicit responsibility of both listing applicants and listed companies to ensure that all information submitted to IDX is accurate, consistent, and complete. This represents a more deliberate articulation of disclosure obligations and reinforces management accountability under the revised framework.

    

4. Transitional Provisions

   The regulation provides that:

   1. listing applications submitted prior to 31 March 2026 will continue to be assessed under the previous framework; and

   2. existing sanctions relating to free float and shareholder requirements remain in effect until compliance with the new framework is achieved.

Conclusion

The revised Regulation I-A represents a comprehensive improvement of Indonesia’s listing framework. The introduction of higher free float thresholds, market capitalization-based criteria, enhanced governance requirements, and stricter accountability standards reflects IDX’s broader objective to improve market liquidity, transparency, and investor confidence.

In practice, these changes may result in higher entry barriers for IPOs and require existing listed companies to adjust their free float levels, increasing compliance and preparation efforts. This may also necessitate earlier structuring considerations at the pre-IPO stage, including with respect to shareholder composition and alignment with strategic investors. At the same time, the new framework is expected to enhance market liquidity, transparency, and investor confidence, which may ultimately support more sustainable valuations and a stronger capital market ecosystem.

Companies intending to list, as well as existing listed companies, should carefully assess their shareholder structure, financial reporting capabilities, and governance practices to ensure compliance with the revised requirements and to mitigate potential regulatory risks. Early assessment and continuous monitoring will be key, particularly given the phased or transitional nature of certain requirements and the potential implications on ongoing post-listing compliance.

This article was written by partners Ayik Candrawulan Gunadi (agunadi@abnrlaw.com), Novario Asca H. (nhutagalung@abnrlaw.com), and associates Aldi Prapanca (aprapanca@abnrlaw.com) and Jennifer Astrid (jastrid@abnrlaw.com).

This ABNR News and its contents are intended solely to provide a general overview, for informational purposes, of selected recent developments in Indonesian law. They do not constitute legal advice and should not be relied upon as such. Accordingly, ABNR accepts no liability of any kind in respect of any statement, opinion, view, error, or omission that may be contained in this legal update. In all circumstances, you are strongly advised to consult a licensed Indonesian legal practitioner before taking any action that could adversely affect your rights and obligations under Indonesian law.