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Indonesia overhauls disclosure rules to avoid MSCI weighting cut
Indonesia says it is expanding shareholder transparency, including disclosures for stakes above 1.0% and plans to raise the free float threshold to 15.0%.
The Financial Times? actually, SCMP Economy says Indonesia is stepping up capital market reforms after MSCI warned in January that the country could be demoted from emerging to frontier status.
According to SCMP Economy, MSCI pointed to what it viewed as opaque shareholding structures and suspicions of coordinated trading, giving Indonesia until May to show progress or risk a weighting reduction and possibly a downgrade after consultation.
Indonesia’s investment minister, Rosan Roeslani, told This Week in Asia that the effort is aimed at building a deeper, more credible, and more investible capital market, rather than focusing on short term index status.
SCMP Economy reports that Indonesia’s Financial Services Authority, the Indonesia Stock Exchange, and the securities depository KSEI now require public disclosure of shareholders holding stakes above 1.0%, along with more detailed investor classifications to flag highly concentrated ownership, and it is planning to lift the minimum free float threshold to 15.0%.