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View all search resultsDemutualizing IDX to deepen market trust
This structural reform is a step in the right direction as the government focuses on boosting Indonesia’s capital market liquidity.
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A group of visitors takes a picture on Jan. 29, 2026 in front of a stock ticker display at the Indonesia Stock Exchange (IDX) in South Jakarta. (AFP/Yasuyoshi Chiba)
T
he Indonesia Stock Exchange (IDX) has caught the eye of local and international investors since the government announced demutualization plans in November last year. Demutualization will convert the IDX from a member-owned organization into a shareholder-owned entity with a broader, more diverse ownership.
The benefits of the new structure would include clearer delineations between ownership, management and trading participants. This structural reform is a step in the right direction as the government focuses on boosting Indonesia’s capital market liquidity. Demutualization is an important starting point, and the exchange would benefit from enhanced governance, transparency and innovation to achieve greater investor participation in Indonesia’s finance sector.
In its current form as a member-owned organization, the IDX is governed by members who make major decisions for the exchange while also being market participants. Demutualization would create an ownership structure more like a publicly listed company, with shares that can be owned by a wider set of shareholders such as strategic investors, institutions and potentially public investors.
There are many upsides to decoupling ownership from trading access. It reduces potential conflicts of interest while providing greater clarity and objectivity around rules, enforcement or listing decisions. A board of directors representing a diverse shareholder group could further strengthen oversight, mandating boards and shareholders accountable to market participants.
In addition to the demutualization process underway, the Financial Services Authority (OJK) this month announced plans to strengthen Indonesia’s financial sector resilience. The planned introduction of a minimum 15 percent free float requirement for IDX-listed companies starting in early 2026 is designed to enhance stability and support deeper, more liquid trading, aligning Indonesia’s capital markets more closely with regional and international practices.
If done right, improvements in governance will also help increase transparency, a key driving factor for market participation. A demutualized model with a diversified shareholder base would require the IDX to follow stronger corporate governance standards that clearly outline ownership, board decisions and key governance appointments.
Aligning disclosure practices and reporting standards with international benchmarks can help prevent price distortions while enhancing transparency, and, in turn, strengthen investor confidence.
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