The Indonesia Stock Exchange (IDX) is preparing a new round of capital market reforms following a decision by S&P Dow Jones Indices (S&P DJI) to place Indonesia on its market classification watchlist. The move comes after the global index provider raised concerns over transparency in share ownership and the effectiveness of market disclosure, issues that could affect Indonesia’s standing as an emerging market if left unresolved.
IDX President Director Jeffrey Hendrik said the exchange would engage directly with S&P DJI to better understand the concerns highlighted during the latest market review. According to him, the exchange is committed to implementing additional measures that strengthen transparency, improve governance standards, and reinforce investor confidence in Indonesia’s capital market.
The planned reforms build on initiatives already introduced by Indonesian financial authorities in recent months. Regulators have increased the minimum public float requirement for listed companies and tightened shareholder disclosure rules to improve transparency and market integrity. These changes are intended to address concerns previously raised by international index providers regarding concentrated ownership structures and limited visibility into beneficial ownership.
S&P DJI’s review does not immediately change Indonesia’s classification. Instead, the watchlist status provides time for authorities to demonstrate that recent reforms are being implemented effectively. Should the exchange and regulators fail to deliver meaningful improvements, Indonesia could face a downgrade from emerging market status, a development that may influence investment flows from global funds tracking international indices.
Jeffrey emphasized that IDX will maintain constructive communication with S&P DJI throughout the evaluation process while continuing to coordinate with the Financial Services Authority (OJK), the Indonesia Central Securities Depository (KSEI), and other stakeholders. The exchange believes stronger disclosure standards and broader structural reforms will help improve market credibility over the long term.
Market observers note that international investors are increasingly focused on transparency, governance, and regulatory consistency when assessing emerging markets. Although Indonesia has already introduced several policy changes, global index providers are expected to evaluate not only the new regulations but also their practical implementation before making any decision on the country’s future classification. For Indonesian authorities, the latest review represents both a challenge and an opportunity to strengthen the competitiveness of the domestic capital market in the eyes of global investors.
