- Increase in Free Float Thresholds to Stay Listed
Previous Reg I-A required a minimum free float of 7.5% of the total listed shares for a listed company to maintain its listing status. New Reg I-A increases this threshold to 15% (or such other percentage approved by the IDX at listing). The new threshold must be met on a phased basis, depending on each listed company's market capitalisation1 and free float position as of 31 March 2026. These deadlines may be adjusted by IDX, subject to market conditions and approval or instruction from the Indonesia Financial Services Authority (Otoritas Jasa Keuangan):
| Listed Company's Market Capitalisation Size and Free Float Position (as of 31 March 2026) | Interim Target | Final 15% Deadline |
|---|
| ≥IDR 5 trillion with free float <12.5% | 12.5% by 31 March 2027 | 31 March 2028 |
| ≥IDR5 trillion with free float between 12.5% to <15% | | 31 March 2027 |
| <IDR5 trillion (regardless of free float level) | | 31 March 2029 |
New Reg I-A also provides that companies currently under sanction for non-compliance with the 7.5% requirement will remain subject to those sanctions, which will continue to accrue until the requirement in New Reg I-A is met.
- New Free Float Shares Definition
The New Reg I-A refines the definition of “free float shares” by introducing additional criteria on the types of shares that may be counted toward the public float.
Under the previous regime, free float shares generally referred to shares held by public shareholders (i.e., below 5%), and excluded (i) shares held by the listed companies’ controlling shareholders and their affiliates, (ii) shares held by the listed companies’ directors and commissioners, and (iii) treasury shares. The revised definition retains these exclusions but further clarifies that only scripless shares that are listed on the IDX may be counted as free float shares.
Importantly, New Reg I-A also expressly excludes shares that are subject to transfer restrictions from being treated as free float. IDX Circular Letter provides examples of such restricted shares, including shares under lock-up arrangements (whether regulatory or corporate transaction-driven), shares held by venture capital or private equity investors and/or shares subject to seizure or blocking imposed by authorities. This refinement provides greater certainty and aligns the concept of free float more closely with actual market liquidity, by ensuring that only freely tradable shares are taken into account.
That said, listed companies may proactively apply to IDX for certain shareholders to be classified as free float shareholders, provided that the beneficial owner of such shares is a public investor. The relevant categories of shareholders that may qualify include, among others, insurers and/or reinsurers, pension funds, foreign sovereign wealth funds, mutual funds and securities companies (brokerages), and social security agencies. Notably, such shares may only be recognised as free float where the relevant shareholding is below 10% of the total listed shares.
- New Free Float Thresholds and Measurement Basis at Listing
IDX has increased the minimum free float requirements at the time of listing. Most notably, the framework shifts from equity-based assessment to a market capitalisation-based approach in determining the applicable thresholds. This represents a more market-aligned methodology, linking public float requirements to the issuer’s valuation at listing rather than its historical financial position.
| Previous Reg I-A | | New Reg I-A |
|---|
| Equity (IDR) | Min Free Float | | Market Cap (IDR) | Min Free Float |
|---|
| <500 billion | 20% | | <5 trillion | 25% |
| 500 billion – 2 trillion | 15% | | 5 trillion – 50 trillion | 20% |
| >2 trillion | 10% | | >50 trillion | 15% |
In addition, IDX retains discretion to prescribe a different minimum free float requirement for listing companies conducting raising of at least IDR30 trillion, allowing flexibility for large-scale offerings.
From a compliance perspective, New Reg I-A also provides that: (i) pre-IPO shareholders are excluded from the calculation of free float; and (ii) the required free float must be maintained for at least 12 months post-listing, reinforcing that compliance is not merely a point-in-time obligation.
Overall, these changes are likely to enhance market liquidity and improve price discovery. At the same time, prospective issuers, particularly mid-sized companies, will need to carefully structure their offering size and shareholder composition to meet the higher thresholds at listing.
- Mandatory Appointment of Certified Financial Statement Preparer
New Reg I-A now requires listing and listed companies to appoint at least one financial statement preparer, either a Director or an employee, who holds an accounting qualification (such as a Chartered Accountant or a Certified Public Accountant) issued by a recognised professional organization in Indonesia or internationally. If this requirement is not met, they must engage an external practicing or public accountant to fulfil this role. This requirement will take effect on 31 March 2027
- Continuing Education Requirement
IDX also requires the Directors, the Commissioners and Audit Committee members of listing and listed companies to complete continuing education on capital markets and corporate governance. However, this requirement will take effect only upon the issuance of the relevant IDX circular letter, which will set out the detailed requirements.
- Controlling Shareholder Lock-Up
IDX has introduced a lock-up framework for controlling shareholders of newly listed companies. Pursuant to New Reg I-A, where required by IDX, a controlling shareholder must retain control and is prohibited from transferring part or all of its shares for at least 12 months from the listing date, or such other period as may be determined by IDX, taking into account the controlling shareholder's strategic role and investor protection considerations.
The IDX Circular Letter further elaborates that controlling shareholders holding more than 50% of the shares may only transfer shares to the extent that their ownership remains above 50%, while those holding 50% or less are prohibited from transferring any shares during the lock-up period. These restrictions also apply to any new controlling shareholders as disclosed in the prospectus.
Controlling shareholders of listing company should factor in restricted exit flexibility post-listing, which may impact structuring of pre-IPO shareholding, the timing of selldowns and overall liquidity planning.
1 Market capitalisation is calculated by multiplying the total number of listed shares by the offering price (for listing companies) or the market price (for already listed companies).
