The Indonesia Stock Exchange has removed the market capitalisation threshold from its screening for companies with highly concentrated shareholdings, widening a transparency drive launched after global index provider MSCI warned it could downgrade the country’s stock market.

The exchange, known as IDX, said on Tuesday that it had scrapped the five trillion rupiah ($276.93 million) cut-off that previously limited which companies were screened for breaching its high shareholding concentration rules. Stocks below that size will now face the same checks as larger companies.

383 stocks now on the concentration list

IDX chief executive Jeffrey Hendrik said smaller stocks also matter to investors and must meet the same transparency standards. “Stocks with market cap below five trillion rupiah are also instruments in which global and domestic investors invest, so they must be given the same level of transparency,” he said.

With the change, 383 stocks now sit on the high shareholding concentration list, an increase of 300. The newly added stocks account for a further 6.16 percent of the total market capitalisation of the Jakarta composite index.

Stocks on the list are excluded from the calculation of the Jakarta composite index, a rule that has been in effect since 2 November.

Reforms follow MSCI downgrade warning

The move is the latest capital market reform by Indonesia aimed at improving transparency around listed companies’ ownership structures. It follows a warning from MSCI that it could move Indonesia from emerging market to “standalone” status, a classification that sits outside its main emerging and frontier benchmarks.

MSCI opened a consultation on the proposed reclassification on 15 October, citing opaque ownership and concerns about the reliability of free-float figures. The consultation runs until 30 April 2027, with a final decision expected by 30 June 2027.

IDX has said it plans to meet MSCI to discuss its reforms, and its development director, Iding Pardi, told reporters in Jakarta on Tuesday that the exchange remained focused on improving information quality, disclosure, supervision and law enforcement alongside the Financial Services Authority.

Billions in flows at stake

MSCI’s November index rebalancing announcement is due on 11 November in Central European time, or 12 November at 05:00 in Jakarta. Bank Danamon chief economist Irman Faiz has estimated that a downgrade to standalone status in the second quarter of 2027 could trigger equity outflows of between $2 billion and $6 billion.

For now, the exchange says its priority is to show that the reforms are being enforced, not only announced. Whether that is enough to keep Indonesia in MSCI’s emerging market index will be judged over the months ahead.