IDX’s new free float rules: key changes and practical insights

Following growing recent pressure from international financial market agencies for greater levels of transparency around Indonesian public companies, on 31 March 2026, the Indonesian Stock Exchange (IDX) finally issued some significant changes to its listing rules through IDX Regulation No. I-A, attached to IDX Board of Directors Decision No. Kep-00045/BEI/03-2026 (IDX Regulation I-A), together with IDX Circular Letter No. SE-00004/BEI/03-2026 (the IDX Circular Letter). 

In summary, the amendments revise both initial and ongoing listing requirements, including higher free float thresholds for initial listing, ongoing free float levels, and an enhanced free float share definition. Taken together, these changes reflect a stronger regulatory focus on improving listed company quality, market liquidity, and investor protection. The amendments came into effect on 31 March 2026, with certain ongoing listing requirements being implemented over time on a transitional basis, as discussed below.

This legal update highlights the key changes to the free float regime under IDX Regulation I-A and some of the associated practical implications for existing IDX-listed companies, prospective IPO candidates, and controlling or strategic shareholders. 

Additional criterion for free float shares

IDX Regulation I-A introduces an additional criterion, namely shares that are not required to be subject to transfer restrictions. Accordingly, “free float shares” are now defined as scripless shares listed on the IDX that are: 

1. owned by shareholders, each holding less than 5% of the total listed shares;
2. not owned by any controller(s) of the listed company or any affiliates of the relevant controller(s);
3. not owned by any members of the board of directors or board of commissioners of the listed company;
4. not treasury shares; and
5. not required to be subject to transfer restrictions. 

The IDX Circular Letter further clarifies that the shares which are required to be subject to transfer restrictions include, among others:

• shares that are currently subject to a restriction period on the transfer of share ownership, whether imposed under applicable regulations or as part of a corporate action of the listed company;
• shares that are part of the portfolio of a venture capital company or private equity firm; and
• shares that are under seizure or a blocking order by law enforcement authorities or other competent authorities.

Practical implication: While these refinements address certain ambiguities in the free float share definition under the previous listing rule, the clarification provided in the IDX Circular Letter introduces new questions regarding the treatment of certain shareholder categories, including venture capital and private equity shareholdings in the context of determination of free float shares. On its face, the new criterion suggests that shareholdings by some venture capital or private equity investors in Indonesian listed companies may not now be regarded as part of the free float shares. At this stage, it remains to be seen how these new concepts will be applied in practice, with further guidance needed from the IDX to provide clarity. 

In this context, although not a new concept, the mechanism under the IDX rules that may be used to apply to the IDX for free float share classification (see below) may become more relevant under the refined definition and clarifications provided in the IDX Circular Letter. This is particularly relevant for venture capital and private equity shareholdings, whose treatment under the new framework may require further clarification and guidance from the IDX.

Exclusion of pre-IPO minority shareholders from free float calculation at initial listing

IDX Regulation No. I‑A now provides that shares held by pre‑IPO shareholders are excluded from the calculation of the free float requirement for purposes of an initial listing (ie immediately following completion of the public offering and before the listing date). As a result, the free float requirement for an initial listing must be satisfied solely through shares offered in the IPO that satisfy the free float criteria. 

Under the previous listing rules regime, although not expressly regulated, the IDX generally permitted listing applicants in practice to include minority pre‑IPO shareholdings that meet the free float criteria in satisfying the free float requirement upon initial listing. 

However, the IDX Circular Letter further clarifies that pre-IPO shareholders satisfying the free float criteria may still be counted towards the continuous obligation to maintain the free float starting from the listing date. 

Practical implication: This change places greater emphasis on pre-IPO planning of the offering size and shareholder distribution, as existing pre-IPO shareholders’ stakes, even if they meet the free float criteria, can no longer be relied upon to satisfy the free float requirement for the initial listing. However, so long as such pre-IPO shareholders satisfy the free float criteria, they can still count towards the free float for the purpose of the continuing obligation to maintain the free float post-listing.

New post-IPO lock-up for controllers

Under IDX Regulation I-A, the IDX finally formalises the requirement that the controllers of a prospective listed company must, where prescribed by the IDX, (i) maintain control of the company and/or (ii) be subject to restrictions on the transfer of part or all of their shareholding.

IDX Regulation I-A also clarifies that where a proposed post‑listing change of control is disclosed in the IPO prospectus, the lock‑up will also apply to incoming controllers. While not expressly regulated under the previous regime, similar lock‑up commitments by existing or incoming controllers have historically been required by the IDX in practice as part of the listing assessment process. Such restrictions apply for a minimum lock‑up period of 12 months from the listing date, or such other period as may be determined by the IDX. In determining the applicable lock‑up period, the IDX will take into account, among other things, the strategic role of the controllers and investor protection considerations.

The IDX Circular Letter further clarifies that lock‑up restrictions are assessed by reference to the direct controller’s shareholding at the time of listing. Where the direct controller holds more than a 50% stake, it may transfer shares during the lock‑up period only if its shareholding remains above 50%. Conversely, where the direct controller holds a 50% stake or less, it is prohibited from transferring any shares during the lock‑up period.

Practical implication: The formalisation of the existing IDX lock-up and control-retention requirements is intended to enhance post-IPO stability. However, these requirements may constrain exit strategies for controlling shareholders, particularly where the controller’s stake at the time of listing is 50% or less.

Enhanced free float threshold for initial IDX listings 

IDX Regulation I-A introduces a new methodology for determining the applicable minimum free float threshold upon initial listing, shifting from an equity‑based approach to a market capitalisation‑based approach. The new minimum initial listing free float requirements are set out in the following table.

*In the context of an initial listing, market capitalisation is determined by multiplying the total number of listed shares by the IPO offer price. 

In addition, under IDX Regulation I-A, the IDX is authorised to determine a different minimum number of free float shares for IPOs raising at least Rp.30 trillion.

Practical implication: By anchoring the applicable minimum listing free float threshold to market capitalisation rather than equity, the free float requirement becomes directly linked to IPO pricing. As a result, listed companies and underwriters will need to assess free float compliance more carefully at the IPO structuring stage. This reduces structuring flexibility compared to the previous equity‑based framework and places greater emphasis on valuation and IPO offering size. 

Increased ongoing free float requirements for IDX listed companies

All listed companies: 

• must have a minimum of 50 million free float shares and free float percentage of 15% of the total listed shares; and 
• must have at least 300 shareholders, each having a single investor identification (SID). 

Additional free float requirements for companies listed on the IDX Main Board: 

• The market capitalisation of free float shares must exceed Rp.200 billion. 
• They must have at least 750 shareholders, each having an SID.

For IPOs raising at least Rp.30 trillion, where the IDX has approved a different minimum number of free float shares at the time of listing, the ongoing free float requirement may follow such approved number. It remains to be seen whether, and to what extent, the IDX would continue to apply the 15% minimum free float threshold in practice as a matter of policy, depending on the scope of the approval granted at listing.

For existing listed companies, these ongoing free float requirements apply immediately, subject to the transitional provisions discussed below. For newly listed companies, these ongoing free float requirements apply only after one year from the listing date, during which the initial listing free float requirements must be maintained.

Practical implication: The higher ongoing free float thresholds introduce continuous pressure on existing listed companies to monitor and ensure maintenance of the required free float level and increase the risk of IDX listing board reclassification where the relevant requirements are not met. They are also relevant in public M&A scenarios, particularly in evaluating post‑acquisition ownership structures and ongoing listing compliance.

In addition, noting that the amended regulations grant the IDX the discretion to determine on a case-by-case basis the minimum free float level required for companies whose IPOs raised at least Rp.30 trillion, the parties concerned will likewise need to find out on a case-by-case basis (as part of their due diligence) the minimum free float level set by the IDX for the particular listed company. 

Transition period for new free float requirements

IDX Regulation I-A provides a range of transition periods for achieving compliance with the new ongoing free float requirements, based on each listed company’s market capitalisation and free float position as at 31 March 2026, as summarised in the following table.

IDX Regulation I-A also provides that, subject to market conditions, the IDX may set different compliance periods for the ongoing free float requirements, upon obtaining the approval of or an instruction from OJK.

Practical implication: IDX listed companies should assess their applicable transition category and compliance deadline by reference to their market capitalisation and free float position as at 31 March 2026, and begin planning the steps required to meet the new ongoing free float requirements within the relevant transition period.

Eligibility of specific shareholders as free float shareholders

As with the previous listing rule regime, IDX Regulation I-A continues to provide that a listed company may apply to the IDX for specific shareholders to be categorised as free float shareholders, provided that the relevant shareholding is held for public investors as the beneficial owners. Only shareholders holding less than 10% of the total listed shares may be proposed to the IDX for recognition as free float under this mechanism.

Such categorisation is not automatic and requires an application by the listed company and IDX approval. The application must be supported by documentation demonstrating, among other things, that the relevant shareholder (i) holds the shares for the benefit of public investors as the beneficial owners, and (ii) is not affiliated with the company’s controller. 

The IDX Circular Letter provides illustrative examples of shareholders that may be regarded as having public investor beneficial ownership, including insurance companies, pension funds, mutual funds, securities brokers, sovereign wealth funds, social security administrators, and other investment structures that can be demonstrated to have public investors as their beneficial owners.

Practical implication: IDX listed companies should assess whether any shareholders may qualify as free float shareholders under this public investor beneficial ownership route in order to support compliance with the minimum free float requirements.

Conclusion

Overall, the amendments under IDX Regulation I‑A reflect IDX and OJK policy direction towards more stringent ongoing free float requirements, alongside a more structured, market capitalisation‑based approach to initial listing thresholds. 

From a practical perspective, the revised framework places greater emphasis on ensuring earlier planning and readiness for IPO candidates and may also require existing or incoming controllers to reassess exit timing, dilution expectations, and post‑IPO ownership strategies, including in public M&A structuring where ongoing listing compliance must also be maintained.

Please reach out to one of the authors or your usual contact at our firm to discuss how these changes may affect your organisation or your IPO/listing plans.