JAKARTA, March 25 (Reuters) - Indonesia's financial regulator has approved the phased three-year implementation of free float requirements drawn up by the Indonesia Stock Exchange, its chief capital market supervisor Hasan Fawzi said on Wednesday.
Fawzi said that the legally-binding "implementing rule" for the free float plan will be issued by the end of March.
The 15% free float requirement is part of a series of capital market reforms designed to allay concerns raised by index provider MSCI about transparency in Southeast Asia's biggest economy. MSCI's warning caused a market rout which wiped off $120 billion in stock valuations.
Before the regulation was approved by the financial regulator OJK, the Indonesia Stock Exchange said companies would be assigned different deadlines of one, two, or three years to comply with the rules.
"We will implement this in phases... to assess the extent of issuers' readiness and the market's absorption capacity over time," Fawzi said after being sworn in as the chief of capital market supervisor.
Together with the stock exchange, OJK will ensure there is enough demand to absorb the free float shares by collaborating with buying entities, including investment managers and other investor communities from home and abroad, Fawzi said.
Reporting by Stefanno Sulaiman, Ananda Teresia; Editing by David Stanway
Source: Reuters