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Journal : Jurnal Akta

The Urgency of a 30 Percent Free Float Regulation to Strengthen Legal Protection for Retail Investors Reliadewi, Wayan Agitha; Putra, Komang Satria Wibawa
JURNAL AKTA Vol 12, No 4 (2025): December 2025
Publisher : Program Magister (S2) Kenotariatan, Fakultas Hukum, Universitas Islam Sultan Agung

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.30659/akta.v12i4.48671

Abstract

This study analyzes the urgency of increasing the minimum free-float threshold to 30 percent as a legal instrument to strengthen retail investor protection and improve the quality of Indonesia’s capital market. The current minimum free-float requirement of 7.5 percent, as regulated in Indonesia Stock Exchange Regulation No. I-A, is no longer sufficient to ensure trading liquidity, prevent price manipulation, or protect minority shareholders. Using a normative legal method based on statutory, conceptual, and comparative approaches, this research compares Indonesia’s regulatory framework with practices adopted in several jurisdictions. The United Kingdom sets a minimum free float of 10 percent for domestic companies and 25 percent for non-UK issuers; Malaysia requires at least 15 percent; Hong Kong mandates a 25 percent public float; Japan imposes a 35 percent tradable share ratio for Prime Market listings; and India requires a minimum public shareholding of 25 percent. The findings show that Indonesia’s free-float level remains far below these jurisdictions, making the market more vulnerable to volatility and potential price intervention. The limited shareholding dispersion also weakens regulatory oversight and reduces the likelihood of Indonesian stocks being included in global indices that rely on free-float-adjusted market capitalization. Increasing the free-float requirement to 30 percent has the potential to broaden public ownership, strengthen corporate governance, enhance liquidity, and increase investor confidence. Establishing this requirement at the statutory level is essential to provide legal certainty and to support more effective supervision by the Financial Services Authority (OJK).
Co-Authors Adie Wahyudi Oktavia Gama Aisyah, Virgina Ayu Anak Agung Ayu Intan Puspadewi Anak Agung Ayu Ngurah Sri Rahayu Gorda Anak Agung Ayu Ngurah Tini Rusmini Gorda Anggarini, Ni Kadek Listya Antari, Putu Eva Ditayani Apriliani, Ni Putu Mia Ardiana Reswari, Ni Putu Puja Ari Rama, Bagus Gede Ariwangsa, I G. N. Oka Ariwangsa, I Gusti Ngurah Oka Aviva Monica Candra Dewi Davi, Nadine Kalina Dewa Ayu Putri Sukadana Erinda Fiskaria Jelahu Ernawati, Ni Luh Ezra Valentino Gibran Haryanto Putra Gorda, A.A.A Ngurah Tini Rusmini Gorda, A.A.A. Ngurah Tini Rusmini Gusi Putu Lestara Permana Gusti Ayu Eviani Yuliantari I G. N. Oka Ariwangsa I G. N. Oka Ariwangsa I Gede Agus Kurniawan I Gede Yoga Bayu Priatama I Gusti Ayu Eviani Yuliantari I Gusti Ngurah Darma Paramartha I Nengah Dasi Astawa I Nengah Dasi Astawa I Nengah Dasi Astawa I Putu Edi Rusmana Intan Adhisti, Sagung Istri Juwita Arsawati, Ni Nyoman Kadek Januarsa Adi Sudharma Kadek Julia Mahadewi Kenanga Asella Theresia Rasuh Komang Ratih, Dewa Ayu Laksmi, Kadek Wulandari Lely Anggreyni Jawak Made Dinda Saskara Putri Made Satria Pramanda Putra Made Sinthia Sukmayanti Mahadewi, Putu Pande Ayu Sintya Maharani, Ni Komang Natasya Ni Kadek Aria Carniva Rukmini Ni Ketut Elly Sutrisni, Ni Ketut Elly Ni Made Cahya Kirana Dewi Ni Made Tiara Chandradita Ni Nyoman Juwita Arsawati Ni Putu Sawitri Nandari Nurisa Oka Ariwangsa, I Gusti Ngurah Pradnyani, Widya Egi Prasada, Dewa Krisna Putra, Made Satria Pramanda Putra, Petrus Kanisius I Kadek Hengky Adi Putri Sumartono, Ni Putu Gita Dewi Naraswari Putri, Kesari Pringga Juwita Sedana Putu Gede Dharma Putra Pratama Rama, Bagus Gede Ari Reliadewi, Wayan Agitha Rizki, I Putu Ayanda Sukadana, Dewa Ayu Putri Veronica, Ni Putu Nadhea Fernanda Wedayanti, Made Widya Dewi Widya Rahayu Yustiani, Dwi