Greater Transparency in Share Ownership as a Step Toward a Stronger Capital Market

 By Kusnandar & Co., Attorneys At Law – Jakarta, Indonesia

 

The recent policy allowing broader public access to share ownership information in Indonesia’s capital market marks an important step toward improving transparency and governance. Under the new rule, information about shareholders who own more than 1 percent of shares in publicly listed companies can now be accessed by the public. This initiative is part of efforts by regulators and market institutions such as Indonesia Stock Exchange and Indonesia Central Securities Depository under the supervision of the Financial Services Authority to improve the quality of information available to investors.

Previously, public disclosure generally focused on shareholders who owned more than 5 percent of a company’s shares. By lowering the disclosure threshold to 1 percent, the structure of share ownership becomes far more transparent and detailed. This change allows investors, analysts, and the public to gain deeper insights into who actually holds significant influence within listed companies.

Transparency is a fundamental pillar of a healthy capital market. In the investment world, information is one of the most valuable assets. Investors rely heavily on accurate and accessible data to understand company structures, identify potential risks, and evaluate corporate governance practices. When information about significant shareholders is easily available, investors can make more rational and informed investment decisions rather than relying solely on speculation or market rumors.

Moreover, increased transparency may help strengthen investor confidence, particularly among international investors. Global investors often view transparency and strong governance standards as key indicators of a reliable financial market. By adopting policies that promote openness, Indonesia demonstrates its commitment to improving market credibility and aligning itself with international best practices. This could also support the country’s efforts to enhance its standing within global market indexes and attract more foreign investment into the national capital market.

However, while greater transparency brings many benefits, it also presents certain challenges. On the positive side, open access to ownership information can improve accountability and reduce opportunities for market manipulation or hidden control structures within companies. Investors can more easily detect concentration of ownership, potential conflicts of interest, or unusual accumulation of shares by certain parties.

On the other hand, some observers argue that excessive disclosure could potentially be exploited by market speculators. Detailed ownership data might enable certain market players to monitor the strategies of major investors and react quickly in ways that create volatility. For this reason, transparency must always be accompanied by strong regulatory oversight and monitoring to ensure that the information is used responsibly.

Another important factor is investor education. Making data publicly available does not automatically mean that all investors will be able to interpret it effectively. Many retail investors still rely heavily on trends, social media discussions, or informal recommendations rather than conducting thorough analysis. The availability of detailed ownership information should therefore be supported by broader financial literacy initiatives so that investors can use the data wisely and productively.

Furthermore, greater transparency may encourage better corporate governance among publicly listed companies. When ownership structures are visible to the public, companies and major shareholders are more likely to act responsibly and consider the reputational impact of their decisions. Public scrutiny can serve as an additional layer of accountability, encouraging more ethical and strategic management practices.

In conclusion, the policy to open access to share ownership information above 1 percent represents a positive development for Indonesia’s capital market. By strengthening transparency, the market can become more credible, efficient, and attractive to investors. Nevertheless, the success of this policy will depend not only on data disclosure but also on effective supervision, investor education, and the commitment of all market participants to maintain integrity within the financial system.

By : K&Co - March 5, 2026