In a significant development for global investors, FTSE Russell has announced a strategic delay to its March 2026 index review for Indonesia. This crucial decision follows recent press conferences from Indonesia’s Financial Services Authority (OJK) and the Indonesia Stock Exchange (BEI), detailing ambitious plans to reform the nation’s capital markets, aiming for enhanced integrity and transparency. The move by the prominent global index provider underscores the potential impact of these reforms on market dynamics and investor sentiment.

The Rationale Behind the Delay: Navigating Uncertainty

FTSE Russell’s postponement is not arbitrary; it’s a carefully considered measure driven by input from its External Advisory Committee and a proactive stance against potential market disruption. The index provider highlighted concerns over unwanted adverse turnover and the inherent challenges in accurately determining accurate free float percentages amidst ongoing reform initiatives. This uncertainty, like a fog descending upon the market, makes precise index adjustments difficult and potentially disruptive for passive investors tracking these benchmarks.

Policy Framework: Exceptional Circumstances Dictate Action

The index provider justifies this unusual step under Rule 2.4 (Exceptional Market Disruption) of its index policy. This rule provides the necessary flexibility for FTSE Russell to safeguard index integrity and protect investors from volatility stemming from significant, evolving market conditions. By invoking this rule, FTSE Russell acts as a prudent custodian, ensuring the indices remain reliable barometers of market performance.

Corporate Actions: A Temporary Suspension

As part of this interim measure, FTSE Russell will temporarily refrain from incorporating specific corporate actions involving Indonesian domestic stocks into its indices. This strategic pause is designed to prevent premature or inaccurate adjustments that could be rendered obsolete by the impending market reforms.

Corporate Actions Paused by FTSE Russell:

• Inclusion of new stocks.
• Deletions arising from standard index reviews.
• Changes in market capitalization classifications.
• Adjustments to the number of shares in issue.
• Revisions to investment weightings.
• Processing of rights issues.

Corporate Actions That Continue to Apply:

Despite the broad suspension, certain essential corporate actions will still be reflected in FTSE Russell’s indices, demonstrating a balance between caution and the need for timely market reflection of fundamental events.

• Deletions resulting from corporate events like mergers or delistings.
• Stock splits and reverse stock splits.
• Issuance of bonus shares.
• Distribution of dividends.

Looking Ahead: The Road to Clarity

FTSE Russell remains committed to closely monitoring the progression of Indonesia’s capital market reforms. Investors can anticipate a further update ahead of the June 2026 FTSE Global Equity Index Series (GEIS) quarterly review announcement, currently slated for May 22, 2026. This commitment provides a clear timeline for market participants to prepare for potential future adjustments.

It is important to note that this specific announcement is unrelated to the LSEG Equity Country Classification for Indonesia, which is on track for its scheduled announcement on April 7, 2026. These are distinct processes, and the market should view them as such.