NEW YORK — Index provider MSCI on Thursday opened a consultation on moving its Indonesia indexes from emerging market to standalone market status, citing unresolved concerns about ownership transparency and suspected coordinated trading.
MSCI expects to proceed unless the consultation produces clear evidence of substantial improvements in market governance and functioning. No final decision has been made. Comments are due April 30, 2027, with a decision by June 30.
Market participants have told MSCI that reforms announced by Indonesian authorities have not produced sufficient, consistent progress across the stock market. Concerns persist about suspected coordinated trading and a lack of evidence of meaningful enforcement, according to the release.
Those concerns are based on feedback reported by MSCI and have not been independently verified by Virginia Times.
MSCI said it no longer considers Indonesia’s emerging market classification appropriate. Feedback from market participants indicated that a move to frontier market status would not adequately reflect the extent of the problems.
The consultation follows MSCI’s June 2026 Market Classification Review, which highlighted investor concerns about opaque shareholding structures and suspected coordinated trading.
Indonesian authorities have announced expanded disclosures for shareholders owning more than 1%, more detailed reporting on investor classifications and High Shareholding Concentration reporting. They also have outlined a path toward a minimum free float requirement of 15%.
Institutional investors have emphasized that the measures must be applied consistently and demonstrate lasting, meaningful results, MSCI said.
In June, MSCI warned that it would consider opening a reclassification consultation if sufficient progress was not evident by its November 2026 Index Review. Thursday’s announcement began that process ahead of the review.
An existing freeze on certain index changes involving Indonesian securities will remain in place until further notice. The restrictions cover changes arising from index reviews or corporate events.
MSCI will not increase Foreign Inclusion Factors or share counts used in its indexes, add securities to the MSCI Indonesia Investable Market Index or move securities into larger size-segment indexes.
The company will continue removing securities identified by Indonesian authorities under the High Shareholding Concentration framework. It also will use the 1% shareholder disclosure data to adjust free float estimates.
MSCI may issue an interim update on feedback during the consultation. Market participants can submit comments by email to [email protected].
