IDX Defends Emerging Market Status as FTSE Skips Watchlist, Regulators Expand Reforms

JAKARTA, Investortrust.id — Indonesian capital market regulators moved swiftly on Monday morning to project institutional stability and structural progress, highlighting that global index compiler FTSE Russell has retained the country within its Secondary Emerging Market tier and kept it completely off its downgrade watchlist.

The announcement came during a joint press briefing at the Indonesia Stock Exchange (BEI) Main Hall on Monday, Oct. 26, 2026, led by Financial Services Authority (OJK) Executive Head of Capital Market Supervision Hasan Fawzi and BEI President Director Jeffrey Hendrik.

The coordinated briefing arrived against a backdrop of ongoing equity market volatility and heightened international scrutiny, following rival compiler MSCI Inc.’s move on Oct. 16 to launch a formal consultation on whether to reclassify Indonesian equities from Emerging Market to Standalone Market status.

Retaining recognition from premier global index compilers is vital to preventing forced portfolio liquidations by benchmark-tracking foreign institutional funds. By confirming that FTSE Russell found no grounds to place Indonesia on a negative watchlist, regulators are leveraging the positive assessment as empirical proof that ongoing market overhauls—targeting liquidity, trading surveillance, and ownership transparency—are delivering tangible results ahead of MSCI’s final classification determination in June 2027.

FTSE Reaffirms Confidence, Skips Watchlist

BEI President Director Jeffrey Hendrik disclosed that FTSE Russell explicitly reaffirmed Indonesia’s Secondary Emerging Market status during a bilateral review meeting held virtually on Friday, Oct. 23, 2026.

"FTSE expressed appreciation for what has been accomplished in the Indonesian capital market and emphasized that their Oct. 6 report clearly stated that FTSE designates Indonesia as a Secondary Emerging Market," Jeffrey said.

Hendrik stressed that Indonesia was not placed on any downgrade watchlist, describing the outcome as a firm external endorsement of domestic overhauls covering transparency, market liquidity, and trading surveillance.

Watchdog Extends Buyback Relief to Mid-2027

To safeguard market resilience, the Financial Services Authority confirmed it will extend its emergency share buyback regulation—which allows listed issuers to execute share repurchases without convening a General Meeting of Shareholders (RUPS)—through June 2027. The emergency relief had previously been scheduled to expire in December 2026.

Hasan Fawzi noted that the extension responds directly to corporate issuers seeking regulatory certainty to absorb shares trading at severe discounts.

"This responds to requests for timeline certainty from our listed companies, which assess their share prices at levels warranting buybacks," Hasan said.

Hasan stressed that repurchases must adhere strictly to statutory governance guidelines under POJK No. 13/2023 and POJK No. 29/2023, requiring strict financial prudence and material disclosure compliance. Crucially, Hasan underlined that corporate buybacks must not compromise mandatory minimum public free-float thresholds, noting that all repurchased treasury shares must eventually be re-floated back to the market in accordance with statutory timeframes.

Independent Experts Join HSC Oversight Panel

In parallel, the stock exchange announced a significant expansion of its High Shareholding Concentration (HSC) committee, raising its composition from four Self-Regulatory Organization (SRO) directors to nine members by seating five independent external experts.

The external additions include Mandiri Sekuritas President Director Alex Widi, UBS Sekuritas President Director Joshua Arief Tanja, National Committee on Governance Policy (KNKG) leadership, academic Prof. Dr. Eduardus Tandelilin, former deputy finance minister Prof. Dr. Mardiasmo, and veteran foreign portfolio manager F. Chapman Taylor of Capital Group.

The restructured body is tasked with establishing independent, credible methodologies to govern which heavily concentrated counters enter and exit the HSC surveillance list, eliminating governance blind spots and addressing persistent international concerns over thin public float and insider price swings. Exchange records currently track 85 listed issuers under active HSC status, while three counters were recently freed from the classification.

Cool Response to Domestic Rating Proposal

Addressing political calls from House of Representatives (DPR) Deputy Speaker Sufmi Dasco Ahmad—who urged Indonesia over the weekend to establish its own sovereign capital market rating framework to counter international index actions—regulators adopted a measured tone.

Hasan Fawzi stated that while the watchdog appreciates constructive input and political support, any operational evaluation of independent rating initiatives will be coordinated prudently over time.

"For matters as specific as this, we will coordinate further when the time is right," Hasan told journalists, underscoring that the primary focus remains executing structural reforms to satisfy global investability benchmarks.

Morning Trading Drops on Broad Sector Drag

The regulatory reassurances did little to stem immediate selling on the trading floor Monday morning. The Jakarta Composite Index (IHSG) tumbled 54.29 points, or 1.0%, to close the first trading session at 5,384, moving within a band of 5,349 to 5,453 on transaction volume of Rp 7 trillion.

The intraday decline was broad-based, pulling down industrial, basic materials, energy, technology, banking, and consumer sectors alike.