Since January 2026, MSCI has applied a freeze on certain index related changes for Indonesian securities resulting from Index Reviews or corporate events. This included increases to Foreign Inclusion Factors (FIF) or Number of Shares (NOS), additions to the MSCI Indonesia Investable Market Index (IMI) or upward migrations across size-segment indexes →As part of the MSCI 2026 Market Classification Review, MSCI reported that market participants had raised significant concerns regarding the investability of the Indonesian equity market, including persistent opacity in shareholding structures and suspected coordinated trading behavior →The Indonesian authorities have announced several reforms, including enhanced disclosure of shareholders with ownership above 1%, more granular investor classification disclosure, High Shareholding Concentration (HSC) reporting, and a roadmap towards a minimum free float requirement of 15% →However, market participants have indicated that, to date, sufficient progress has not been observed consistently across the Indonesian equity market. Significant concerns remain around market dysfunction, including continued suspected coordinated trading behavior and lack of evidence of meaningful enforcement
MSCI proposes to reclassify the MSCI Indonesia Indexes from Emerging Market (EM) to Standalone Market status. The proposed reclassification would be reflected in all relevant global and regional composite indexes. MSCI will continue applying the existing freeze on certain index related changes for Indonesian securities resulting from Index Reviews or corporate events until further notice MSCI welcomes feedback until April 30, 2027 and will announce its decision on or before June 30, 2027. MSCI will closely monitor developments in the Indonesian market and may issue an interim report with any updates on the consultation. To participate in the consultation, please provide your feedback by e-mail to clientservice@msci.com
Stability of the Institutional Framework →Improved shareholder transparency through stable and reliable ownership disclosures →Sustained consistent implementation of announced reforms, with evidence of material impact across the market →Consistent enforcement across the market of HSC framework and the 1% disclosure threshold 3 Efficiency of the Operational Framework →Meaningful enforcement against coordinated trading and float manipulation →Materially improved reliability of free float across the market, not only for index constituents or names already flagged →Effective market surveillance across the entire market, with evidence of sustained enforcement beyond the largest securities Market Classification Consultation
Do you agree with the proposal to reclassify the MSCI Indonesia Indexes from Emerging Market to Standalone Market status? o If yes, what would be the appropriate timeline for implementation, and should it be implemented in one step? o If not, should the MSCI Indonesia Indexes be reclassified to Frontier Markets status? → Have the announced reforms been implemented consistently across the broader Indonesian equity market, beyond index constituents and the largest securities, and brought sufficient transparency on ownership and tradable free float? → Do you consider the announced measures complete, fully implemented and sustainable? → Have you observed evidence of meaningful enforcement against coordinated trading? → Once the freeze on index related changes, in place since January 2026, is lifted, are market participants concerned that coordinated trading could return, and what evidence would address that concern? → What level of concern do you have about the suspected coordinated trading behavior or the overall reliability of free float, especially compared to other Emerging Markets? → Have you observed material improvements in market governance and functioning that MSCI should consider in the consultation? Discussion Points Market Classification Consultation → MSCI welcomes feedback on this reclassification proposal until April 30, 2027 and will announce its decision on or before Jun e 3 0,
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.