Indonesia Stock Exchange to excise tightly held firms from select indexes under the banner of market reform

On 22 April 2026, the Indonesia Stock Exchange announced that it will, as part of an ongoing series of market reforms, remove from certain flagship indexes those listed companies whose share ownership is concentrated in the hands of a few shareholders, a move that ostensibly seeks to promote broader participation while simultaneously acknowledging the exchange’s long‑standing inability to curb ownership concentration through any means other than post‑hoc index exclusion.

The decision, which applies to several of the exchange’s most widely followed gauges, stipulates that any firm whose top shareholders collectively hold a proportion of shares exceeding a threshold—though the exact figure was not disclosed—will be stripped of its index status, thereby subjecting those entities to the likely consequences of reduced visibility, diminished passive‑investment inflows, and the implicit suggestion that the market’s supervisory mechanisms have, until now, been content to tolerate a structural imbalance that undermines the very premise of a diversified equity market.

While the exchange presents the measure as a proactive step toward enhancing market integrity, the timing and methodology reveal a predictable reliance on reactive index management rather than the establishment of robust pre‑listing ownership rules, an approach that underscores a systemic reluctance to address the root causes of concentration and instead opts for a cosmetic reshuffling that, in practice, will penalise investors who have already been exposed to the volatility generated by the dominance of a narrow shareholder base.

Observers are likely to note that the removal of tightly held firms from the indexes, though framed as a reformist gesture, may ultimately serve as a convenient scapegoat for the exchange’s broader institutional deficiencies, as it sidesteps the more challenging task of instituting comprehensive disclosure requirements, enforcing antitrust provisions, and cultivating a corporate culture in which dispersed ownership is a prerequisite rather than an afterthought.

Published: April 22, 2026