Indonesia extends share buyback flexibility amid MSCI downgrade risk
The financial regulator is also urging changes to ownership-concentration assessments and trading surveillance at the Indonesia Stock Exchange.
Indonesia’s Financial Services Authority (OJK) said it is extending permission for share buybacks without shareholder approval until June 2027, as part of its response to MSCI raising the possibility of moving the Indonesia Stock Exchange (BEI) from emerging-market to standalone status.
Hasan Fawzi, OJK’s chief executive for capital market, financial derivatives and carbon exchange supervision, outlined the measures on 26 October 2026. He said the extension addressed requests from issuers considering buybacks for clarity on how long the exemption would remain available.
Buybacks must follow POJK No. 13 of 2023, with flexibility under POJK No. 29 of 2023, particularly articles 29, 6 and 12, Hasan said. Companies must consider prudence, their financial capacity and disclosure obligations. The exemption does not remove minimum free-float requirements or the deadlines for meeting them.
OJK is also urging BEI to refine its high shareholding concentration methodology. The proposed improvements include greater transparency and stronger governance, with independent participants from outside self-regulatory organisations joining the working committee.
A further measure calls for stronger trading surveillance, including methods to detect unusual transaction patterns and coordinated trading, alongside procedures for follow-up action. Hasan said reforms would continue across trading integrity and governance, with more intensive engagement involving index providers, global and domestic institutions, retail investors and other market participants.
